Retirement Savings Calculator
Estimate your retirement savings, project growth over time, and see if you're on track to meet your retirement income goals.
How Retirement Savings Planning Works
Retirement planning is about ensuring your savings can generate enough income to sustain your lifestyle after you stop working. The earlier you start, the more time compound growth has to multiply your contributions. Even modest monthly savings can grow into a substantial nest egg over decades.
The Compound Growth Formula
This calculator uses the future value formula: FV = PV(1 + r)^n + PMT × [((1 + r)^n − 1) / r], where PV is your current savings, r is the monthly rate of return, n is the number of months until retirement, and PMT is your monthly contribution. This accounts for both the growth of your existing savings and the compounding of regular contributions.
The 4% Rule Explained
The 4% rule provides a simple way to estimate sustainable retirement income. It suggests withdrawing 4% of your total savings in the first year of retirement, then adjusting that amount for inflation each year. Based on historical market data, this approach has a high probability of making your money last 30 years or more. For example, $1,000,000 in savings would support roughly $3,333 per month. The "Years Savings Will Last" result in this calculator goes further by simulating actual withdrawals with continued investment returns.
Why Inflation Matters
Inflation reduces the purchasing power of your money over time. A dollar today won't buy as much in 30 years. This calculator shows both nominal projections (raw dollar amounts) and inflation-adjusted projections (what those dollars will actually be worth). The gap between the two lines on the chart illustrates how significantly inflation can erode your retirement savings. Always plan using real (inflation-adjusted) returns to avoid falling short of your goals.
Frequently Asked Questions
What is the 4% rule for retirement?
The 4% rule is a guideline suggesting you can withdraw 4% of your retirement savings in the first year and adjust for inflation each subsequent year, with a high probability your money will last at least 30 years. For example, with $1,000,000 saved, you could withdraw $40,000 per year ($3,333/month). This rule originated from the 1994 Trinity Study analyzing historical stock and bond returns.
How much do I need to save for retirement?
A common target is 25 times your desired annual retirement income (the inverse of the 4% rule). If you want $60,000/year in retirement, aim for $1,500,000. However, your actual number depends on your retirement age, expected lifestyle, healthcare costs, Social Security benefits, and how long you expect to live.
What rate of return should I assume?
A balanced portfolio of stocks and bonds has historically returned about 7-8% before inflation (4-5% after inflation). Younger investors with more stocks might assume 8-10%, while those near retirement with more bonds might use 5-6%. Being conservative with your assumptions is safer — if your investments outperform, you'll have a pleasant surplus.
Why does inflation matter for retirement planning?
Inflation erodes purchasing power over time. At 3% inflation, $1,000 today will only buy about $412 worth of goods in 30 years. This calculator shows both nominal and inflation-adjusted projections so you can see the real value of your future savings. Planning without accounting for inflation can leave you significantly short of your goals.