Retirement Savings Calculator

How to Use This Calculator

The typical retirement age is 62-67. Retiring earlier means your savings must last longer.

Enter 401k, IRA, and Roth IRA balances. Exclude regular savings or money needed before retirement.

Monthly contributions should include employer match amounts. Standard employer match: 50-100% up to 6% of salary.

Return rate: 6-8% is conservative, 10% matches historical stock market averages. Overestimating returns puts retirement at risk.

Most retirees need 70-80% of pre-retirement income. Work expenses drop but healthcare and leisure costs rise.

Social Security estimates are available at ssa.gov. The average benefit is $1,900/month.

Inflation averages 3%. $50,000 today = $108,000 in 30 years at 3% inflation.

How Much to Save for Retirement

Take your annual retirement income and multiply by 25. For $58k/year, that's $1.45 million (this is for illustration). This calculation uses the 4% withdrawal rate.

Withdrawal Strategies

Withdraw 4% of retirement savings in year one, then adjust that dollar amount for inflation annually.

Historical data from 1926 onward shows this rate worked in all 30-year periods tested, including retirements that started during the 1929 crash and 2008 crisis. $1 million = $40,000/year. $500,000 = $20,000/year.

Income Sources and Needs

Work expenses disappear: 401k contributions stop (often 15-20% of income), commutes end, work wardrobes aren't needed, and mortgages get paid off. Travel-heavy retirements may need 90%. Paid-off mortgages may only need 60%.

Average Social Security is $1,900/month ($22,800/year). If you need $62,000/year and get $24,000 from Social Security, savings cover $38,000/year. That's $950,000 saved (25x $38,000) instead of $1.55 million.

Medicare starts at 65. Earlier retirement means buying marketplace insurance ($800-1,500/month per person) until then. Retiring at 50 means budgeting $150,000-300,000 for 15 years of healthcare coverage.

Inflation

At 3% annual inflation, $50,000 today requires $108,347 in 30 years to maintain the same purchasing power.

Building Your Retirement Savings

• A 25-year-old saving $300/month reaches $1.18 million by 65 at 8% returns. Wait until 35 and you need $625/month for the same result.
• A 50% employer match up to 6% of salary equals a 3% raise.
• Save 15-20% of gross income for retirement.
• Get a raise? Bump retirement contributions first, before spending adjusts to the new income level.
• Automate contributions through payroll deduction.

Tax Strategy

Tax-advantaged accounts: 401k limit is $23,500/year, IRA limit is $7,000/year (2025).

The 22% tax bracket or below favors Roth accounts (after-tax). The 24% bracket or above favors Traditional (pre-tax). Splitting between both creates tax diversification.

Early 401k withdrawals cost 10% penalty plus income tax. Age 50+ can contribute extra: $7,500/year to 401k, $1,000/year to IRA. Working part-time in early retirement cuts withdrawals and extends growth.

Retirement Planning Mistakes

Starting Late

$300/month becomes $1.18 million over 40 years. Start at 35 and you need $625/month. Start at 45 and you need $1,425/month. Wait a decade and your required monthly savings more than double.

Missing Employer Match

If your employer matches 50% up to 6% of salary and you contribute 3%, you receive half the available match. On $72,000 salary, contributing 6% ($4,320) gets you $2,160 match. Contributing 3% gets $1,080 match.

Early Withdrawals

Taking $30,000 from a 401k at age 35 costs $3,000 in penalties and roughly $7,500 in taxes. That $30,000 would grow to $380,000 by age 65 at 8% returns.

Planning Gaps

Converting savings to income needs three things: withdrawal strategy (how much per year), tax strategy (which accounts to tap first), and spending plan.

Retirees often spend more in their first decade - travel costs spike, hobbies expand, restaurant visits increase. Spending tends to decline after age 75 when health limits activity.

Healthcare and Social Security

Claiming Social Security at 62 reduces benefits by 30% compared to age 67. $1,950/month at 67 becomes $1,365/month at 62. Over 30 years, that's $211,000 less in benefits.

Social Security's trust fund pays 75% of scheduled benefits through 2098 without changes. Full benefits require Congressional action - likely adjustments to the income cap or retirement age.

Fidelity estimates a 65-year-old couple will spend $315,000 on healthcare in retirement. Medicare has premiums, copays, and gaps requiring supplemental coverage at $300-500/month.

401(k) vs IRA Accounts

Employer-sponsored 401(k) plans have a 2025 limit of $23,500 ($31,000 if 50+). Often includes employer match. Contributions are pre-tax (Traditional) or after-tax (Roth 401k). Investment options limited to employer's plan menu.

Individual IRAs have a 2025 limit of $7,000 ($8,000 if 50+). No employer match available. Contributions may be tax-deductible depending on income and access to workplace retirement plan. Wide investment choices. Roth IRAs offer tax-free growth and withdrawals. Income limits apply (can't contribute if earning over ~$150,000 single, ~$225,000 married).

Contribution Priority

1. Contribute to 401k up to employer match
2. Max out Roth IRA if eligible ($7,000)
3. Max out 401k ($23,500 total)
4. Taxable brokerage account for additional savings

Traditional vs Roth

The 24%+ tax bracket makes Traditional (pre-tax) better if you expect lower brackets in retirement. The 22% bracket or below makes Roth (after-tax) better, especially if you expect higher future taxes. Splitting between both creates tax diversification.

Sources of Retirement Income

Primary Income Sources

Primary retirement savings. The 4% rule: withdraw 4% in year one, then adjust that dollar amount for inflation annually. $1 million produces $40,000/year. Traditional 401k/IRA withdrawals are taxed as ordinary income. Roth withdrawals are tax-free.

Federal retirement benefit calculated from your 35 highest-earning years. Average benefit: $1,900/month. Maximum benefit: $3,800/month. Claim as early as 62 (reduced benefit) or delay to 70 (8% increase per year). Guaranteed lifetime income that adjusts for inflation.

Supplemental Income

Employer pensions are now rare outside government jobs. They offer guaranteed monthly income for life. Options usually include: larger payment for your life only, or smaller payment continuing for your spouse. Inflation protection varies by plan.

Some retirees work part-time for income and health insurance. $1,000/month in income reduces required retirement savings by $300,000 (using 25x multiplier). Working the first 5 years of retirement extends portfolio longevity.

Rental property produces monthly income. $1,500/month net rental income reduces required retirement savings by $450,000. Rental property requires active management. Vacancies, repairs, and tenant issues create risk.

Annuities convert a lump sum into guaranteed lifetime income. A $100,000 annuity might produce $500/month for life. You get guaranteed income but lose the principal and can't pass it to heirs. Fees vary widely.

Early Retirement Considerations

Save 50-70% of income to retire in 10-15 years instead of 40. This demands high income and low expenses. Savings must last 40-50 years instead of 30, needing larger savings.

Tests of the 4% withdrawal rate assume 30-year retirements. For 40-50 years, drop to 3-3.5% instead. Retiring at 50 needs 28-33x annual expenses instead of 25x. $58,000/year = $1.63-1.93 million instead of $1.45 million.

Marketplace health insurance costs $800-1,500/month per person before 65. Retiring at 50 means budgeting $150,000-300,000 for 15 years of coverage. Some early retirees work part-time for health insurance.

Social Security Timing

Claiming Social Security at 62 instead of 67 reduces benefits by 30% for life. Early retirees can use savings from 50-70, then claim Social Security at 70 for maximum benefits (24% higher than age 67).

FIRE Variations

Coast FIRE: Save aggressively early, then stop contributing entirely. Example: $300,000 saved at 35 grows to $1.79 million by 65 at 8% returns with zero additional contributions. Work lower-stress job without retirement contributions.

Barista FIRE: Retire from full-time career but work part-time for health insurance and supplemental income. Part-time work reduces withdrawals and extends growth. Some early retirees work 20 hours/week for 5-10 years.

Catching Up on Retirement Savings

Late starts are recoverable with aggressive action.

Success depends on understanding what's needed at different starting points and adjusting strategy accordingly. Catch-up contributions, longer work timelines, and expense cuts all play a role in closing the gap created by delayed saving.

By Age

Contributing $800/month from 40-65 reaches roughly $900,000 at 8% returns. Add $300/month employer match = $1.13 million. At a 70% income replacement rate, this covers retirement for $60,000-70,000 earners.

$1,500/month from 50-65 reaches $536,000. With employer match and Social Security, this works for moderate income earners ($50,000-60,000). Higher earners need to save $2,000-3,000/month.

Strategies

Age 50+ can contribute extra: $7,500/year to 401k ($31,000 total), $1,000/year to IRA ($8,000 total). Peak earning years often occur from 50-65, making this the time to accelerate savings.

Working to 70 instead of 65 provides 5 more years of contributions, 5 more years of growth, 5 fewer years of withdrawals, and 24% higher Social Security.

Downsize housing, relocate to a lower cost area, or reduce transportation costs. Cut expenses 20-30% and save the difference for 5 years in your 50s. This offsets 15 years of undersaving. Example: $700/month for 10 years at 8% returns = $127,000 saved. Put every spare dollar into retirement accounts for 10-15 years.