Retirement Calculator
The Retirement Calculator helps you plan for a financially secure retirement by projecting how much you need to save and how much you will have. It factors in your current age, retirement age, current savings, monthly contributions, expected return rate, and desired retirement income. The calculator shows whether you are on track or need to save more. Retirement planning is critical because you will need 70-80% of your pre-retirement income to maintain your lifestyle, and Social Security may only cover 30-40% of that.
Formula
Retirement Corpus Needed = Annual Retirement Income × 25 (4% withdrawal rule) Future Value of Savings = PV × (1 + r)^n + PMT × [((1 + r)^n − 1) ÷ r] PV = current savings PMT = monthly contribution r = monthly return rate n = months until retirement
Example
If you are 35, want to retire at 65, have $100,000 saved, save $1,000/month, expect 7% return, and need $60,000/year in retirement: Corpus needed = $60,000 × 25 = $1,500,000 Years to retirement = 30 FV = $100,000 × (1.07)^30 + $12,000 × [((1.07)^30 − 1) ÷ 0.07] FV = $100,000 × 7.61 + $12,000 × 94.46 FV = $761,000 + $1,133,520 = $1,894,520 You exceed your target by $394,520.
How to Use
- Enter your current age and desired retirement age
- Input your current retirement savings
- Enter your monthly contribution amount
- Set your expected annual return rate (6-8% is conservative)
- Review your projected retirement corpus and whether it meets your needs
Frequently Asked Questions
How much do I need to retire?
A common rule is 25× your annual expenses (the 4% rule). For $60,000/year expenses, you need $1.5M. For $100,000/year, you need $2.5M. Use 30× for a more conservative estimate.
What is the 4% withdrawal rule?
The 4% rule suggests withdrawing 4% of your portfolio annually in retirement. This should last 30+ years based on historical market data. Adjust for inflation each year to maintain purchasing power.
When should I start saving for retirement?
As early as possible. Starting at 25 vs. 35 can double your retirement corpus due to compound interest. Even small contributions ($200/month) in your 20s can grow to $500,000+ by retirement.
Should I use pre-tax or Roth accounts?
Use both (tax diversification). Pre-tax (401k, traditional IRA) lowers current taxes. Roth (Roth 401k, Roth IRA) provides tax-free withdrawals in retirement. Having both gives you flexibility to manage taxes in retirement.
What return rate should I use for projections?
Use 6-7% for a conservative estimate (balanced portfolio), 8-10% for stocks only. After inflation, real returns are 4-7%. Using a conservative rate gives you a safety margin if markets underperform.