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🏖️ Finance Retirement Calculator
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Retirement Calculator

Project your retirement savings, find out how much you need, and see the cost of waiting

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Projected Savings at Retirement
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In today's dollars (inflation-adj.)$0
Monthly income (4% rule)$0
Years money will last0 yrs
Total contributions$0
Total investment growth$0
Retirement Nest Egg
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Monthly Income
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Money Lasts
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Total Savings Needed
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Nominal goal (4% rule)$0
Inflation-adjusted goal$0
Required monthly savings$0
Years to save0 yrs
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Required Monthly Savings
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To hit your goal
Goal amount$1,000,000
Growth from current savings$0
Still needed from contributions$0
Years remaining0 yrs
Cost of Waiting — Required Monthly Savings if You Started at Age:

How Much Do You Need to Retire?

The most important number in retirement planning is your "magic number" — the total portfolio value you need on day one of retirement to sustain your lifestyle for the rest of your life. The most widely accepted method for calculating this is the 4% rule, derived from the landmark Trinity Study.

The formula is simple: Annual Retirement Spending ÷ 0.04 = Required Nest Egg. If you want $4,000/month in retirement ($48,000/year), you need $48,000 ÷ 0.04 = $1,200,000 saved.

The 4% Rule and the Trinity Study

The Trinity Study (Cooley, Hubbard, and Walz, 1998) analyzed historical US market returns from 1926 onward and found that a retiree withdrawing 4% of their initial portfolio, adjusted for inflation each year, had a very high probability of not running out of money over any 30-year retirement. The portfolio studied was a mix of stocks and bonds.

Some caveats: the 4% rule assumes a 30-year retirement. If you retire at 55 and live to 95, you need a 40-year horizon — in which case a more conservative 3.5% or even 3% withdrawal rate is prudent. The rule also predates ultra-low interest rate environments, so modern planners sometimes use 3.5% as a baseline.

Step-by-Step Example: 35-Year-Old With $50,000 Saved

Let's say you're 35, have $50,000 saved, contribute $500/month, expect a 7% annual return, and want to retire at 65 with $4,000/month in income.

  • Step 1 — Future value of $50,000: At 7% annual return over 30 years: $50,000 × (1 + 0.07/12)^360 = $385,000
  • Step 2 — Future value of $500/month contributions: $500 × [(1.005833^360 − 1) / 0.005833] = $567,000
  • Step 3 — Total at retirement: $385,000 + $567,000 = $952,000
  • Step 4 — Monthly income (4% rule): $952,000 × 0.04 / 12 = $3,173/month
  • Step 5 — Gap: You want $4,000/month but will have $3,173. To close the gap, you'd need to increase contributions to ~$680/month or reduce spending expectations.

The Power of Starting Early

No single factor matters more in retirement savings than time. The math of compound interest rewards early starters exponentially — not just proportionally. Here's what $500/month at a 7% annual return looks like at three different starting ages:

Start at 25
$1.3M
40 years of growth
Start at 35
$607k
30 years of growth
Start at 45
$245k
20 years of growth

Starting at 25 instead of 35 results in more than double the retirement balance from the same $500/month contribution. A 10-year head start is worth over $700,000. The investor who started at 25 contributed $240,000 in total (480 months × $500) but accumulated $1.3M — the remaining $1.06M came from compound growth alone.

How Inflation Affects Retirement Savings

Inflation silently erodes the purchasing power of your future savings. $4,000 today will not buy $4,000 worth of goods in 30 years. At 3% average inflation, that $4,000 in today's money requires $9,700/month in 30 years just to maintain the same purchasing power.

This is why our calculator shows two figures: the nominal projected balance (what your account will literally read) and the inflation-adjusted value in today's dollars. For planning purposes, the inflation-adjusted figure is more meaningful because it tells you what your future savings will actually be worth in terms of current purchasing power.

Practical implication: if you're targeting $4,000/month in today's money for retirement 30 years away, your actual target income at retirement day needs to be ~$9,700/month. Your required nest egg using the 4% rule therefore becomes not $1.2M but $2.9M. This is why planning with inflation baked in is essential.

Investment Return Assumptions

Our default uses a 7% annual return, which represents the historical average nominal return of the S&P 500 (approximately 10% nominal, minus ~3% inflation for a 7% real return). However, your actual returns will vary based on asset allocation:

  • 100% stocks (S&P 500): ~10% historical nominal return, high volatility
  • 80/20 stocks/bonds: ~8.5% return, moderate volatility — common for younger investors
  • 60/40 stocks/bonds: ~7% return, lower volatility — classic retirement allocation
  • 40/60 stocks/bonds: ~5.5% return — conservative, suitable near retirement

As you approach retirement, most financial advisors recommend gradually shifting from stocks toward bonds to reduce sequence-of-returns risk (the danger of a market crash in your first few retirement years, which is particularly damaging).

Frequently Asked Questions

How much money do I need to retire? ▼
The most widely used rule is the 4% rule: you need 25× your desired annual retirement spending. If you want $4,000/month ($48,000/year), you need $48,000 ÷ 0.04 = $1,200,000 saved. This assumes a balanced portfolio of stocks and bonds, a 30-year retirement, and is based on the Trinity Study from 1998. Your actual number depends on Social Security income, desired lifestyle, retirement length, and healthcare costs.
What is the 4% rule for retirement? ▼
The 4% rule (also called the safe withdrawal rate) states that you can withdraw 4% of your retirement portfolio in year one, then adjust for inflation each year, and have a very high probability of not running out of money over a 30-year retirement. It comes from the 1994 Trinity Study which analyzed historical market returns. Example: $1,000,000 portfolio → $40,000/year or $3,333/month. Some modern researchers suggest 3.5% for longer retirements or uncertain markets.
How much should I save for retirement each month? ▼
A common rule of thumb is to save 15% of gross income for retirement (including any employer match). If you're starting late, you may need to save 20–25%. The exact amount depends on your age, current savings, expected Social Security benefit, and target retirement age. Use our Retirement Goal tab to calculate your specific required monthly savings based on your target income and timeline.
What is the best age to start saving for retirement? ▼
The best time to start is as early as possible — ideally in your 20s. $500/month from age 25 to 65 at 7% return grows to approximately $1.3 million. Starting at 35 instead reduces that to $607,000 — less than half the outcome for a 10-year delay. Starting at 45 yields only $245,000. The earlier you start, the more the market does the heavy lifting. Even $100/month at 22 is worth far more than $500/month at 40.
How does compound interest affect retirement savings? ▼
Compound interest is the engine of retirement savings — you earn returns not just on what you contribute, but on all previous returns. After 30 years, the interest earned typically exceeds all contributions combined. Example: $500/month for 30 years at 7% = $567,000 total contributions, but the portfolio grows to $607,000 — meaning $40,000 came from growth. Over 40 years: contributions total $240,000 but growth adds over $1,000,000. This is why time in the market is the most powerful retirement tool.
What happens if I retire early (before 65)? ▼
Early retirement (before 65) creates three challenges: (1) A longer drawdown period — retiring at 55 means potentially 35–40 years of withdrawals, requiring a larger nest egg or lower withdrawal rate (closer to 3%). (2) No Medicare until age 65, so you need private health insurance. (3) 401(k) and IRA withdrawals before age 59½ typically incur a 10% penalty plus income tax. The FIRE movement (Financial Independence, Retire Early) addresses this with strategies like Roth conversion ladders and taxable brokerage accounts.
How long will my retirement savings last? ▼
How long your savings last depends on your withdrawal rate, portfolio return, and inflation. At a 4% withdrawal rate with a 60/40 portfolio, historical data shows a 90%+ success rate over 30 years. If you withdraw more — say 5% — the failure rate rises significantly, especially in bad markets in early retirement (sequence-of-returns risk). Our calculator shows years to depletion based on your balance, withdrawal amount, and an assumed 3% portfolio return in retirement.
Should I prioritize a 401k or IRA for retirement savings? ▼
The ideal order: (1) Contribute to 401(k) up to your employer match — this is a 50–100% instant return. (2) Max out a Roth IRA ($7,000/year in 2024) for tax-free growth. (3) Return to 401(k) to max the full limit ($23,000/year). (4) Taxable brokerage for anything beyond that. Traditional 401(k) reduces taxable income now but you pay taxes in retirement. Roth accounts are funded with after-tax dollars but grow and withdraw tax-free — generally better if you expect to be in a higher tax bracket in retirement.
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