Retirement calculator

How the retirement calculator works

The math is simple compound growth with monthly contributions. Start with your current balance, add your contribution each month (yours plus employer match), grow the whole thing at your expected return rate, and repeat until your target retirement age. The output is the pre-inflation balance you'll have when you retire.

Two additional numbers matter: the safe withdrawal amount (4% of the balance, the so-called 4% rule) and what that amount is worth in today's dollars once you strip out decades of inflation. The nominal balance often looks impressive — $2.8 million! — but in 2060 dollars that might buy the lifestyle that $800,000 buys today. The inflation adjustment is where most DIY retirement planners get blindsided.

The assumptions that actually move the output

Return rate

For a portfolio that's mostly US stocks over 30+ years, 7% real (after inflation) or 10% nominal is the textbook assumption based on the 1926–2024 historical average. Using 6–7% nominal (what the calculator defaults to) is a more conservative planning number that builds in some margin for a lower-return future. Using 10% is optimistic; 5% is pessimistic. Run it both ways and see how sensitive your plan is to the assumption.

Contribution amount

Include the full monthly contribution — yours plus employer match. If you contribute 10% of a $100K salary ($833/month) and your employer matches 4% ($333/month), the calculator should see $1,166/month total. Forgetting the match undersells your progress dramatically over 30 years.

Current balance

Sum every retirement account you have — 401(k), IRA, Roth IRA, rollovers, old pension buyouts, HSA if used for retirement. Don't include taxable brokerage accounts you plan to retire on — those earn different tax treatment and deserve their own plan.

Retirement age

Each year you delay retirement does two powerful things: it gives your balance another year of compounding, and it reduces the number of retirement years your balance needs to cover. Delaying from 62 to 67 often solves a $300K shortfall entirely.

The 4% rule (and where it's wrong)

The 4% rule comes from the Trinity study — a 1998 analysis showing that a retiree who withdraws 4% of their starting balance in year one, then adjusts for inflation each subsequent year, would have survived every 30-year retirement window in US history. That's the origin of the 25× expenses rule for financial independence.

Problems with it, in order of importance:

• It assumes a 30-year retirement. For people retiring at 50 or earlier (FIRE crowd), the rule needs to be closer to 3.25–3.5% for a 40–50 year horizon.
• It ignores sequence-of-returns risk. A bad first 5 years in the market can sink a portfolio that would have survived the same bad years later.
• It ignores Social Security. Social Security covers a meaningful portion of income for most US retirees — maybe $25–$40K a year — which reduces how much your portfolio needs to generate.
• It ignores taxes. Traditional 401(k)/IRA withdrawals are taxable. A $40K withdrawal from a Traditional account might be $34K after tax.

Treat the calculator's 4% output as directionally useful, not a precise income number. For detailed retirement income planning, you want a Monte Carlo simulation with all these factors — and ideally a fee-only planner once you're within 5 years of retiring.

Priority order for retirement savings

1. Capture the full employer match.If your employer matches 4%, contribute at least 4%. That's a 100% instant return — nothing in finance beats it.
2. Pay off high-interest debt (anything above 7–8%). Credit cards and personal loans first. See credit card payoff.
3. Build the emergency fund to its full size. See emergency fund calculator.
4. Max the Roth IRA if eligible ($7,000/year under 50 in 2026). Tax-free growth for 30+ years is extraordinarily valuable. See the Roth vs Traditional comparison.
5. Max the HSAif you have an HDHP ($4,300 individual / $8,550 family in 2026). Triple tax-advantaged — it's the single best retirement account that exists.
6. Go back to the 401(k) and fill it toward the $23,500 limit.
7. Taxable brokerage for anything above that.

Allocation by age (very rough)

The old rule was "your age in bonds" (65 years old → 65% bonds). That's now considered overly conservative, especially for people who will live into their 90s. Modern defaults:

• 20s–30s: 90–100% stocks, 0–10% bonds.
• 40s: 80–90% stocks, 10–20% bonds.
• 50s: 70–80% stocks, 20–30% bonds.
• Approaching retirement: 60% stocks, 30% bonds, 10% cash.
• In retirement: 50–60% stocks, 30–40% bonds, 5–10% cash.

Target-date funds in 401(k) plans do this automatically. If you're not confident rebalancing yourself, pick the target-date fund closest to your retirement year and forget it. The expense ratio is usually fine (0.05–0.15%) and the glide path is reasonable.

When to re-run this calculator

• Every January, as part of an annual financial review.
• When you change jobs (contribution amount, match, and account location all change).
• When you get a meaningful raise (rerun with the new contribution).
• When your target retirement age shifts — common around age 50.
• After a major life event (marriage, home purchase, kids).

FAQ

Should I include Social Security in the projection?

Not in this calculator directly. Think of SS as a floor under your retirement income — estimate it at ssa.gov and subtract that annual amount from the "desired retirement income" field. Then the calculator solves for what your portfolio needs to cover the rest.

Is it too late to start saving at 45?

No, but the required savings rate goes up sharply. Someone starting at 45 with $0 who wants to retire at 65 needs to save roughly 25–30% of income, versus 10–15% for someone starting at 25. Start now anyway — late compounding still builds meaningful wealth.

What rate should I assume?

Use 6% nominal for a planning-conservative estimate, 7% for a balanced one, and 8% for an optimistic one. Avoid 10% unless you have strong conviction about your portfolio — it plans for a best-case history, not an expected future.