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Retirement Calculator: How Much Will You Have and Will It Last?
See what your savings could grow to by retirement, what monthly income that pays in today's dollars, and how long the money lasts.
How the calculator works
It runs in two phases. While you are working, your current savings grow at the pre-retirement return and you add your monthly saving each month. At retirement it converts the total into today's dollars by removing inflation, because $1 million in 30 years will not buy what $1 million buys now.
For the retirement phase it works out the level monthly income, in today's dollars, that would use up the money exactly by the age you plan until, assuming the after-retirement return. It also shows the simpler 4% rule income for comparison, which is designed to leave money over.
Example: age 35, $50,000 saved, $800 a month
Saving $800 a month from 35 to 67 at a 6% return turns $50,000 into about $1.27 million. After 32 years of 2.5% inflation, that is worth about $574,000 in today's money.
Spread over 23 years of retirement (to age 90) with a 4% return, it can pay about $2,450 a month in today's dollars, rising with inflation each year. The 4% rule gives a more cautious $1,914 a month. Add Social Security on top of either figure.
Ways to close a gap
- Save more now. Each extra $100 a month at 35 adds about $116,000 by 67 at a 6% return.
- Work a little longer. Two more years means two more years of saving and growth, and two fewer years to fund. It also raises your Social Security benefit by roughly 7% to 8% a year until 70.
- Use tax breaks. A 401(k) match or a Roth IRA makes every dollar go further.
- Lower your target. Paying off a mortgage before retiring can cut the income you need by a third or more.
Frequently asked questions
How much do I need to retire?
A common rule of thumb is 25 times the yearly spending your savings must cover, which is the same as the 4% rule. If you want $40,000 a year on top of Social Security, aim for about $1 million.
What is the 4% rule?
It says you can withdraw 4% of your savings in the first year of retirement and then raise that amount with inflation each year, and your money has historically lasted at least 30 years in most market conditions.
What return should I assume?
A diversified stock and bond portfolio has historically earned roughly 5% to 7% a year before inflation over long periods. Using 6% before retirement and a lower 4% to 5% after, when portfolios are usually more conservative, is a reasonable middle ground.
Does this include Social Security?
No. The result is the income from your own savings. Add your estimated Social Security benefit, which you can check at ssa.gov/myaccount, to get your total retirement income.