Retirement Calculator

About the Retirement Calculator

Planning for retirement is one of the most important financial steps you can take. Our retirement calculator helps you estimate how much you need to save for retirement and how long your retirement savings will last, allowing you to make informed decisions about your financial future.

How to Use This Retirement Calculator

This calculator offers two calculation modes:

How Much To Save Mode

Use this mode to determine how much you need to save for retirement and whether your current savings strategy is on track.

1. Current Age: Enter your current age.
2. Current Retirement Savings: Enter the amount you've already saved for retirement.
3. Monthly Contribution: Enter how much you're currently contributing to retirement each month.
4. Expected Annual Return: Enter your expected investment return rate (typically 4-8% for a diversified portfolio).
5. Expected Inflation Rate: Enter the expected inflation rate (historically around 2-3%).
6. Retirement Age: Enter the age you plan to retire.
7. Life Expectancy: Enter your expected age at death (for planning purposes).
8. Desired Annual Retirement Income: Enter how much yearly income you want during retirement.
9. Increase Income With Inflation: Choose whether your income should increase with inflation.
10. Expected Monthly Social Security Income: Enter your expected monthly Social Security benefit.

How Long Will It Last Mode

Use this mode to determine how long your retirement savings will last based on your withdrawal rate.

1. Current Age: Enter your current age.
2. Current Retirement Savings: Enter the amount you've already saved for retirement.
3. Monthly Contribution: Enter how much you're currently contributing to retirement each month.
4. Expected Annual Return: Enter your expected investment return rate.
5. Expected Inflation Rate: Enter the expected inflation rate.
6. Retirement Age: Enter the age you plan to retire.
7. Annual Withdrawal Amount: Enter how much you plan to withdraw each year during retirement.
8. Increase Withdrawals With Inflation: Choose whether your withdrawals should increase with inflation.

Understanding Your Retirement Results

How Much To Save Results

• Required Retirement Savings: The total amount you need to have saved by retirement to fund your desired lifestyle.
• Projected Savings at Retirement: The amount you're on track to have at retirement based on your current savings and contributions.
• Savings Goal Status: Indicates whether you're on track, behind, or ahead of your retirement savings goal.
• Additional Monthly Savings Needed: Shows how much more you need to save monthly to reach your retirement goal.

How Long Will It Last Results

• Estimated Duration of Savings: How long your retirement savings will last based on your withdrawal rate.
• Savings Depleted At Age: The age at which your retirement savings would be depleted.
• Total Amount Withdrawn: The total amount you'll be able to withdraw over your retirement.

Key Retirement Planning Factors

1. The Power of Compound Interest

Time is your most valuable asset when saving for retirement. The earlier you start, the more you benefit from compound interest. Even small contributions can grow significantly over decades of saving.

2. Inflation's Impact

Inflation erodes purchasing power over time. A dollar today will buy less in the future, which is why your retirement planning must account for inflation. This calculator adjusts future values to account for this effect.

3. Longevity Risk

People are living longer than ever before, meaning retirement savings need to last longer. It's generally better to plan for a longer retirement than a shorter one to avoid outliving your savings.

4. The 4% Rule

A common retirement planning guideline is the 4% rule, which suggests withdrawing 4% of your retirement portfolio in the first year, then adjusting that amount annually for inflation. This strategy is designed to provide a steady income while preserving your portfolio.

Retirement Savings Strategies

Tax-Advantaged Accounts

Maximize contributions to tax-advantaged retirement accounts like 401(k)s, IRAs, and Roth IRAs. These accounts offer tax benefits that can significantly increase your retirement savings.

Asset Allocation

Your asset allocation (the mix of stocks, bonds, and other investments) should align with your risk tolerance and time horizon. Generally, younger investors can tolerate more risk and should consider a higher allocation to stocks.

Diversification

Spread your investments across different asset classes, sectors, and geographical regions to reduce risk. Diversification can help protect your portfolio from market volatility.

Regular Reviews

Review your retirement plan annually or whenever you experience significant life changes. Adjust your savings rate, asset allocation, and retirement age as needed.

Social Security Considerations

Social Security benefits typically replace about 40% of pre-retirement income. The age at which you start collecting benefits affects the amount you receive:

• Collecting at 62 (the earliest possible age) results in permanently reduced benefits.
• Waiting until full retirement age (66-67 for most people) provides your full benefit amount.
• Delaying benefits until age 70 increases your benefit amount by about 8% per year beyond full retirement age.

Final Thoughts

Retirement planning is a personal journey that depends on your unique circumstances, goals, and risk tolerance. This calculator provides estimates based on the information you provide, but it's recommended to consult with a financial advisor to create a comprehensive retirement plan tailored to your specific needs.