Retirement Calculator
Plan your path to financial independence
Determine if you are on track to retire comfortably. Our free retirement calculator projects your portfolio growth based on current savings, monthly contributions, and expected returns, then shows the gap between where you are and where you need to be. Includes Social Security estimates.
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How to Plan for Retirement: A Complete Guide
The 4% Rule: How Much You Can Safely Withdraw
The 4% rule is the gold standard for retirement withdrawal planning. It states you can withdraw 4% of your portfolio in year one, then adjust that amount for inflation each subsequent year, and your money should last at least 30 years. For a $1M portfolio, that means $40,000/year or about $3,333/month. The rule was developed by William Bengen in 1994 after analyzing 75 years of market data. It has survived every major market downturn including the Great Depression, 2008 financial crisis, and the 2020 pandemic crash.
What you need to retire: Multiply your desired annual retirement income by 25. If you need $60,000/year, you need $1.5M. If you need $80,000/year, you need $2M. Social Security typically replaces 30-40% of pre-retirement income, so you may need less than you think.
Social Security Benefits: What to Expect
Social Security replaces about 40% of pre-retirement income for average earners (up to 33% for high earners). The average monthly benefit in 2026 is approximately $1,976. Benefits are based on your 35 highest-earning years. You can claim as early as 62 (with reduced benefits) or delay up to 70 (with increased benefits). Each year you delay past 62 increases your benefit by about 7-8%. For someone whose full retirement age benefit is $2,000/month, claiming at 62 reduces it to $1,400, while delaying to 70 increases it to $2,480. The break-even age is typically around 80-82.
Required Minimum Distributions (RMDs)
Once you reach age 73 (as of 2026), you must begin taking Required Minimum Distributions from Traditional 401(k)s and IRAs. The RMD is calculated by dividing your account balance by a life expectancy factor from IRS tables. Failure to take your RMD results in a 25% excise tax on the amount not distributed. Roth IRAs have no RMDs during the owner's lifetime, which is a significant planning advantage.
Roth vs Traditional: Which Retirement Account Wins?
How Much Should You Save for Retirement?
Financial planners recommend saving 15-20% of gross income for retirement, including any employer match. A common framework: save 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. These targets assume you want to maintain your current lifestyle in retirement and plan to retire at 67.
On a $75,000 salary, saving 15% ($11,250/year including employer match) for 35 years at 7% return grows to approximately $1.7M. At the 4% withdrawal rate, that provides $68,000/year in retirement, plus Social Security.
Tips for Maximizing Retirement Savings
- Get the full employer match — If your employer matches 50% up to 6%, contribute at least 6%. This is an instant 50% return on your money.
- Max out tax-advantaged accounts — 401(k) at $23,500, IRA at $7,000, HSA at $4,150 (single) for 2026.
- Start early — A 25-year-old investing $500/month at 7% will have $1.2M by 65. A 35-year-old investing the same amount will have only $567K.
- Automate everything — Set up automatic 401(k) deductions and IRA transfers. You cannot spend what you never see.
- Rebalance annually — As you age, shift from stocks to bonds. A common formula: hold your age as a percentage in bonds (e.g., 35 years old = 35% bonds, 65% stocks).
Internal Resources
Explore related tools: Compound Interest Calculator · 401K Calculator · Roth IRA Calculator · Salary Calculator
Written by Finance Experts · Last updated September 2026
Social Security COLA History (2015–2025)
Social Security benefits receive annual Cost-of-Living Adjustments (COLAs) based on the Consumer Price Index. The 2022 adjustment of 8.7% was the largest in 40 years, reflecting high inflation.
Source: Social Security Administration (SSA). COLA is effective January of each year.
S&P 500 Returns by Decade
Frequently Asked Questions
How much do I need to retire?
A common rule: multiply your desired annual retirement income by 25. If you need $60,000/year, you need $1.5M. Social Security typically replaces 30-40% of pre-retirement income, so you may need less than you think. Use the 4% rule: withdraw 4% of your portfolio annually.
What is the 4% rule for retirement withdrawals?
The 4% rule states you can withdraw 4% of your portfolio in year one, adjust for inflation annually, and your money should last 30 years. On a $1M portfolio, that is $40,000/year or $3,333/month. Developed by William Bengen in 1994, it has survived every major market downturn.
How much should I save for retirement each month?
Financial planners recommend 15-20% of gross income, including employer match. At minimum, contribute enough to get the full employer match (usually 3-6%). A 25-year-old saving 15% of $50K salary ($625/month) at 7% return will have $1.2M by 65.
What is the difference between a 401(k) and an IRA?
A 401(k) is employer-sponsored with higher limits ($23,500 for 2026) and possible employer match. An IRA is individual with lower limits ($7,000) but more investment options. Both come in Traditional (pre-tax) and Roth (after-tax) versions. Max out 401(k) match first, then IRA.
When should I start saving for retirement?
As early as possible. A 25-year-old investing $500/month at 7% will have $1.2M by 65. A 35-year-old investing the same amount will have only $567K. Those 10 extra years are worth over $600K — not from any special skill, but from compound growth on more contributions over more time.
What is Social Security and how much will I get?
Social Security replaces about 40% of pre-retirement income for average earners. The average monthly benefit in 2026 is approximately $1,976. You can claim as early as 62 (reduced) or delay to 70 (increased by ~7-8%/year). The break-even age is typically around 80-82.
Should I choose a Traditional or Roth retirement account?
Traditional: tax deduction now, taxed in retirement. Best if you expect a lower tax rate later. Roth: after-tax now, tax-free withdrawals. Best if you expect a higher tax rate later or want tax-free growth. Many advisors recommend splitting between both for flexibility.
What are Required Minimum Distributions (RMDs)?
Once you reach age 73, you must begin taking RMDs from Traditional 401(k)s and IRAs. The amount is calculated by dividing your balance by a life expectancy factor. Failure to take RMDs results in a 25% excise tax. Roth IRAs have no RMDs during the owner's lifetime.
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What is a Retirement Calculator?
Retirement planning is determining how much money you need to save to maintain your lifestyle after you stop working. Most financial advisors recommend replacing 70-80% of your pre-retirement income.
How This Calculator Works
Enter your current age, retirement age, current savings, monthly contribution, and expected return rate. The calculator projects your portfolio growth year by year and shows whether you will meet your goal.
401(k) vs Roth IRA vs Traditional IRA
Real-World Example: Retirement at 65
Scenario: Lisa, age 35, earns $80,000/year. She contributes 15% to her 401(k) with a 4% employer match.
- Her contribution: $12,000/year ($1,000/month)
- Employer match: $3,200/year (4% of salary)
- Total annual: $15,200
- At 7% return for 30 years: $1,441,491
Without the employer match, the same contributions grow to $1,143,007. That $3,200/year match adds $298,484 to her nest egg — a 23x return on free money.
Common Retirement Planning Mistakes
Data Sources & Citations
- OfficialSocial Security Administration
- OfficialInternal Revenue Service (IRS)
Disclaimer: Calculators and tools on this site are for informational purposes only and do not constitute financial, tax, legal, medical, or investment advice. Results are estimates and may not reflect actual rates or terms. Consult a qualified professional before making decisions. Privacy Policy
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