Project your retirement corpus and see how long it will last. Two-phase model: accumulation (growing your savings) and withdrawal (sustaining retirement). Inflation-adjusted, with year-by-year savings growth and the 4% safe withdrawal rate.
Enter your current age, planned retirement age, current retirement savings, and monthly contribution. Set an expected annual return rate (6-7% is a common assumption for a diversified portfolio) and an inflation rate (2.5-3% is typical).
Enter your expected annual spending in retirement in today's dollars — the calculator adjusts this for inflation to show the actual amount you will need at retirement age. Enter any other income sources like Social Security, pension, or rental income that will reduce your required drawdown.
See your projected corpus at retirement, its inflation-adjusted purchasing power in today's dollars, and how many years your savings will last at your projected spend. The year-by-year growth table shows the accumulation phase. The 4% safe withdrawal rate check shows whether your corpus supports your planned spending.
A common rule of thumb is to have 25 times your expected annual expenses saved at retirement — this is based on the 4% safe withdrawal rate. If you expect to spend $60,000 per year in retirement (in today's dollars), aim for approximately $1.5 million in savings. This rule assumes a 30-year retirement with a diversified portfolio.
The 4% rule states that retirees can withdraw 4% of their portfolio in year one of retirement, then adjust that amount annually for inflation, and have high confidence their savings will last 30 years. It was derived from the Trinity Study (1998) which analyzed historical U.S. market data. At 4% withdrawal, a 60/40 stock/bond portfolio historically succeeded 95%+ of the time over 30-year periods.
Conservative planners use 5-6% nominal return (approximately 3% real after 2.5% inflation). More aggressive assumptions use 7-8% for an equity-heavy portfolio. The S&P 500 has averaged approximately 10% annually over the long term, but this includes significant volatility. For planning purposes, using 6-7% provides a reasonable middle ground that accounts for diversification and market cycles.
Inflation erodes the purchasing power of fixed savings over time. At 3% annual inflation, $1 million today will have the purchasing power of about $744,000 in 10 years and $554,000 in 20 years. This means if you retire with $1 million in 20 years, it will only feel like $554,000 of today's purchasing power. This is why inflation-adjusted projections are essential for accurate retirement planning.
Traditional accounts (401k, traditional IRA) use pre-tax contributions — you get a tax deduction now but pay taxes on withdrawals in retirement. Roth accounts use after-tax contributions — no deduction now, but all withdrawals in retirement are completely tax-free. Which is better depends on whether you expect your tax rate to be higher now or in retirement. Most advisors recommend having both to manage tax flexibility in retirement.
As early as possible — the power of compound interest means every year you delay has an enormous cost. Starting at 25 versus 35 with the same monthly contribution at 7% return, the person who starts 10 years earlier accumulates nearly double the retirement corpus by age 65. The general target is to save 10-15% of gross income for retirement, including any employer match.
