Retirement Calculator

How Much Do You Need to Retire?

The standard rule is to accumulate 25× your annual expenses (the 4% withdrawal rule). This means if you spend $60,000/year, you need $1.5M. A more conservative 3.5% SWR (for longer retirements) requires $1.71M.

How to Use the Retirement Calculator

How to Calculate Your Retirement Savings by Hand: Worked Example

You can reproduce the calculator's projection with nothing more than the future value formula. Suppose you are 35 with $50,000 already saved, you contribute $500 per month ($6,000 per year), you expect a 7% average annual return, and you plan to retire in 30 years.

Step 1 — grow the existing balance. Multiply the current savings by (1 + r) raised to the number of years: 1.07³⁰ = 7.6123. So $50,000 × 7.6123 = $380,613. Your existing nest egg alone grows more than sevenfold without another dollar added.

Step 2 — grow the contributions. Annual contributions use the future value of an annuity: $6,000 × [(1.07³⁰ − 1) ÷ 0.07] = $6,000 × 94.4608 = $566,765.

Step 3 — add them together. $380,613 + $566,765 = $947,377 projected at retirement. Applying the 4% rule, that balance supports roughly $37,895 of annual withdrawals in the first year of retirement. If that income falls short of your target, the formula shows exactly which lever to pull: a larger monthly contribution changes Step 2, while working longer changes the exponent in both steps.

How much difference does starting at 25 instead of 40 make?

The exponent is the most powerful variable in the formula. Saving $500 per month at 7% from age 25 to 65 (40 years) compounds to about $1,197,811. The identical contribution started at age 40 (25 years) reaches only about $379,494. The late starter deposits just $90,000 less in total, yet retires with roughly $818,000 less — the gap is almost entirely lost compounding, not lost deposits. This is why most planners treat time in the market as more valuable than contribution size.

What Percentage of Income Should You Save for Retirement at Each Age?

A widely used rule of thumb is to save 15% of gross income including any employer match, beginning in your 20s. Starting later requires more: someone beginning at 35 typically needs around 20–25%, and a 45-year-old starting from zero often needs 30% or more to retire on schedule. Rather than guessing, run your real numbers through the calculator above and adjust the monthly contribution until the projected balance covers 25 times your expected annual spending.

Should you count Social Security in the projection?

Many planners model Social Security as a reduction in the income your portfolio must produce rather than as an asset. If you expect $20,000 per year in benefits and need $60,000 to live on, your savings only need to generate $40,000 — which cuts the required nest egg under the 4% rule from $1.5 million to $1 million. Because benefit levels and claiming ages vary, running the projection both with and without benefits brackets your realistic range.

What return assumption is realistic?

The long-run average return of a diversified US stock portfolio has historically been near 10% nominal, or roughly 7% after inflation. Using 7% and today's dollars keeps the projection honest: the output is spending power, not an inflated future number. Conservative planners drop to 5–6% to build in a margin of safety, especially within ten years of the retirement date when sequence-of-returns risk matters most.

Does the projection assume a constant contribution throughout your career?

No — most real careers see contributions rise with income. Modeling a flat $500/month for 30 years, as the worked example does, is intentionally conservative: many savers increase contributions after raises or once a mortgage is paid off. If your $500/month grows by even 3% annually to track modest raises, the 30-year total in the worked example rises from about $947,000 to well over $1.1 million, since later, larger contributions still get decades to compound.

Frequently Asked Questions