Retirement Calculator
Project retirement savings, calculate 4% safe withdrawal rate, employer match impact, and determine if you are on track for retirement.
Employer Match (Free Money!)
Savings Breakdown at Retirement
Projected Savings at 65
$2,033,700
You're On Track!
At your current pace, you'll have enough to support $5,000/month in retirement for 60+ years.
The 4% Rule
With $2,033,700 in savings, you can safely withdraw $81,348/year ($6,779/month) without running out of money for 30+ years. This is based on the Trinity Study, which found that a 4% withdrawal rate has historically sustained portfolios through various market conditions.
Retirement Savings Tips
- • Always get your full employer match - it's free money
- • Max out your 401(k) ($23,500 in 2025, +$7,500 catch-up if 50+)
- • Consider a Roth IRA for tax-free growth ($7,000/year limit)
- • Increase contributions by 1% each year with raises
- • Keep investment fees low - index funds beat most active managers
Related Calculators
About This Calculator
The Retirement Calculator helps you plan for a secure financial future by projecting how your savings will grow over time. Calculate your projected retirement savings, determine if you're on track to meet your goals, and discover how much you need to save monthly. Whether you're just starting your career or approaching retirement age, this calculator accounts for 401(k) contributions, employer matching, IRA investments, Social Security estimates, and the 4% safe withdrawal rule to give you a complete picture of your retirement readiness.
How to Use the Retirement Calculator
- 1Enter your current age and target retirement age.
- 2Input your current retirement savings (401k, IRA, and other accounts combined).
- 3Set your monthly contribution amount and annual income.
- 4Add your employer match percentage and cap (if applicable).
- 5Select an expected rate of return (conservative 5%, moderate 7%, or aggressive 9%).
- 6Enter your desired monthly retirement income.
- 7Review your projected savings, monthly income, and whether you're on track.
- 8Use "When Can I Retire?" mode to find your earliest possible retirement age.
Formula
**Retirement Savings Formula:**
FV = PV(1 + r)^n + PMT × [((1 + r)^n - 1) / r]
Where:
- FV = Future Value (projected retirement savings)
- PV = Present Value (current savings)
- r = Monthly rate of return (annual rate / 12)
- n = Number of months until retirement
- PMT = Monthly contribution (yours + employer match)
**Safe Withdrawal Amount:**
Annual withdrawal = Savings × 0.04 (4% rule)
Monthly income = (Savings × 0.04) / 12The retirement calculator uses the future value formula for compound growth with regular contributions. It factors in employer matching, catch-up contributions after 50, and applies the 4% safe withdrawal rule to determine sustainable retirement income.
The 4% Rule Explained
The 4% Safe Withdrawal Rate
The 4% rule is a guideline for how much you can safely withdraw from your retirement savings each year without running out of money. Based on the famous Trinity Study (1998) and subsequent research:
How It Works:
- Withdraw 4% of your portfolio in year one of retirement
- Adjust for inflation each subsequent year
- Your money should last 30+ years with 95%+ success rate
Example:
- Retirement savings: $1,000,000
- Year 1 withdrawal: $40,000 ($1M x 4%)
- Year 2 (3% inflation): $41,200
- Monthly income: ~$3,333/month
The Math Behind It: If you need $X per year in retirement, multiply by 25 to get your target savings:
- $40,000/year x 25 = $1,000,000 needed
- $60,000/year x 25 = $1,500,000 needed
- $80,000/year x 25 = $2,000,000 needed
Important Considerations:
- The 4% rule assumes a 50/50 stock/bond allocation
- Lower withdrawal rates (3-3.5%) are more conservative
- Social Security reduces how much you need from savings
Employer Match: Free Money You Shouldn't Miss
Why Employer Match Is Critical
If your employer offers a 401(k) match, not taking full advantage is literally leaving free money on the table.
How Employer Match Works:
| Match Type | How It Works | On $75K Salary |
|---|---|---|
| 100% match up to 3% | Dollar-for-dollar up to 3% of salary | $2,250/year free |
| 50% match up to 6% | $0.50 per $1 up to 6% of salary | $2,250/year free |
| 100% match up to 6% | Dollar-for-dollar up to 6% of salary | $4,500/year free |
The Compound Effect Over Time:
$2,250/year in free employer match over 30 years at 7% return:
- Total employer contributions: $67,500
- With compound growth: $227,000+
Maximizing Your Match:
- Contribute at least enough to get the full match (typically 3-6% of salary)
- Check your vesting schedule - some matches require years to fully vest
- If you can't max your 401(k), at least max the match
- The match doesn't count against your contribution limit
Warning: 22% of Americans don't get their full employer match, missing out on an average of $1,336/year in free money.
How Much Do I Need to Retire?
Retirement Savings Targets by Age
While everyone's situation is different, here are commonly cited benchmarks:
| Age | Savings Target | Multiple of Salary |
|---|---|---|
| 30 | $50,000-$100,000 | 1x salary |
| 35 | $100,000-$175,000 | 2x salary |
| 40 | $175,000-$350,000 | 3x salary |
| 45 | $300,000-$525,000 | 4x salary |
| 50 | $450,000-$700,000 | 5-6x salary |
| 55 | $600,000-$1,000,000 | 7x salary |
| 60 | $800,000-$1,400,000 | 8-10x salary |
| 65 | $1,000,000-$2,000,000 | 10-12x salary |
Factors That Affect Your Target:
- Retirement lifestyle - More expensive = more savings needed
- Social Security - Higher benefits reduce savings needed
- Healthcare costs - Major expense before Medicare at 65
- Pension income - If you have one, reduces savings target
- Retirement age - Earlier retirement = more savings needed
- Life expectancy - Plan for 30+ years of retirement
Quick Rule of Thumb: Multiply your desired annual retirement income by 25 (based on 4% rule). If you want $60,000/year in retirement, aim for $1,500,000 in savings.
Asset Allocation by Age
Age-Based Investment Strategy
A common rule of thumb: subtract your age from 110 (or 120 for more aggressive investors) to get your stock allocation percentage.
Traditional Age-Based Allocation:
| Age Range | Stocks | Bonds | Cash |
|---|---|---|---|
| 20s | 90% | 10% | 0% |
| 30s | 80% | 15% | 5% |
| 40s | 70% | 25% | 5% |
| 50s | 60% | 35% | 5% |
| 60s | 50% | 40% | 10% |
| 70+ | 40% | 45% | 15% |
Why This Matters:
- Stocks = Higher returns, higher risk, best for growth
- Bonds = Lower returns, lower risk, better for preservation
- Cash = Stable but loses to inflation, good for emergencies
Modern Approach - Glide Path Funds: Target-date funds automatically adjust allocation as you age:
- Target 2060 Fund: ~90% stocks (for someone retiring in 2060)
- Target 2040 Fund: ~70% stocks
- Target 2025 Fund: ~50% stocks
Key Considerations:
- Don't get too conservative too early - you need growth
- Sequence of returns risk matters most near retirement
- Rebalance annually to maintain target allocation
- Consider your total picture (Social Security, pension, etc.)
Catch-Up Contributions After 50
Supercharge Your Savings After 50
The IRS allows additional "catch-up" contributions to retirement accounts once you turn 50, recognizing that many people need to accelerate their savings.
2025 Catch-Up Limits:
| Account Type | Regular Limit | Catch-Up | Total 50+ |
|---|---|---|---|
| 401(k)/403(b) | $23,500 | +$7,500 | $31,000 |
| IRA (Traditional/Roth) | $7,000 | +$1,000 | $8,000 |
| SIMPLE IRA | $16,500 | +$3,500 | $20,000 |
| HSA (55+ Family) | $8,550 | +$1,000 | $9,550 |
The Power of Catch-Up Contributions:
15 years of maxing out 401(k) catch-up ($7,500/year) at 7% return:
- Total extra contributed: $112,500
- With compound growth: ~$188,000
Strategies for Catching Up:
- Max employer plans first - Get full match, then max contributions
- Use Roth conversions - In lower-income years, convert traditional to Roth
- HSA triple tax advantage - Pre-tax in, tax-free growth, tax-free out for medical
- Backdoor Roth IRA - For high earners above Roth income limits
- Mega backdoor Roth - After-tax 401(k) contributions converted to Roth
Don't Forget:
- Catch-up contributions can be made throughout the year
- Deadline is December 31 for 401(k), April 15 for IRA
- Employer match doesn't count against your limit
Required Minimum Distributions (RMDs)
Understanding RMDs After 73
Once you reach age 73 (as of 2023 SECURE 2.0 Act), you must start taking Required Minimum Distributions from traditional retirement accounts.
RMD Rules:
- First RMD due by April 1 following the year you turn 73
- Subsequent RMDs due by December 31 each year
- Failure to take RMD results in 25% penalty (reduced from 50%)
- Roth IRAs have NO RMDs during your lifetime
2025 RMD Table Examples:
| Age | Distribution Period | RMD on $500,000 |
|---|---|---|
| 73 | 26.5 | $18,868 |
| 75 | 24.6 | $20,325 |
| 80 | 20.2 | $24,752 |
| 85 | 16.0 | $31,250 |
| 90 | 12.2 | $40,984 |
Strategies to Minimize RMD Impact:
- Roth conversions before 73 - Convert traditional to Roth in lower-income years
- Qualified Charitable Distributions (QCDs) - Donate up to $105,000 directly from IRA to charity
- Delay if still working - 401(k) at current employer exempt if you don't own 5%+
- Strategic timing - Avoid two RMDs in one year by taking first RMD in year you turn 73
Social Security Basics
Understanding Your Social Security Benefits
Social Security replaces about 40% of pre-retirement income for average earners, making it a crucial piece of your retirement puzzle.
How Benefits Are Calculated:
- Average Indexed Monthly Earnings (AIME) - Average of your highest 35 years of earnings, adjusted for inflation
- Primary Insurance Amount (PIA) - Your benefit at full retirement age
- Full Retirement Age (FRA) - 67 for those born 1960 or later
Impact of Claiming Age:
| Claiming Age | % of Full Benefit | Example ($2,000 FRA) |
|---|---|---|
| 62 | 70% | $1,400/month |
| 63 | 75% | $1,500/month |
| 64 | 80% | $1,600/month |
| 65 | 86.7% | $1,733/month |
| 66 | 93.3% | $1,867/month |
| 67 (FRA) | 100% | $2,000/month |
| 68 | 108% | $2,160/month |
| 69 | 116% | $2,320/month |
| 70 | 124% | $2,480/month |
2025 Social Security Facts:
- Maximum benefit at 67: ~$3,900/month
- Maximum benefit at 70: ~$4,873/month
- Average benefit: ~$1,900/month
- Cost of Living Adjustment (COLA): Announced annually
When to Claim:
- Claim early (62-66) if: Poor health, need the money, survivor benefits available
- Wait until 70 if: Good health, other income sources, maximize lifetime benefits
- Break-even is typically around age 80-82
Check Your Benefits: Create an account at ssa.gov to see your estimated benefits based on your actual earnings history.
Retirement Income Strategies
Creating Reliable Income in Retirement
The "bucket strategy" is a popular approach to managing retirement income:
Three-Bucket System:
| Bucket | Time Horizon | Assets | Purpose |
|---|---|---|---|
| 1 | 0-2 years | Cash, CDs, Money Market | Near-term expenses |
| 2 | 3-7 years | Bonds, Bond Funds | Medium-term stability |
| 3 | 8+ years | Stocks, Growth Investments | Long-term growth |
Benefits of the Bucket Approach:
- Bucket 1 provides peace of mind during market downturns
- Avoids selling stocks when they're down
- Allows time for stocks to recover before you need that money
- Psychological comfort to stay the course
Income Floor Strategy: Combine guaranteed income sources to cover essential expenses:
- Social Security + Pension (if any) = Base income
- SPIA (Single Premium Immediate Annuity) for additional guaranteed income
- Investments cover discretionary spending
Pro Tips
- 💡Always contribute enough to get your full employer 401(k) match - it's an instant 50-100% return on your money.
- 💡Increase your contribution rate by 1% each year, especially when you get a raise - you won't miss money you never saw.
- 💡Take advantage of catch-up contributions after 50: an extra $7,500/year in your 401(k) and $1,000 in your IRA.
- 💡Keep investment fees low by choosing index funds - a 1% fee difference can cost hundreds of thousands over your career.
- 💡Don't touch your retirement savings early - early withdrawals face 10% penalties plus income taxes.
- 💡Diversify between traditional and Roth accounts for tax flexibility in retirement.
- 💡Plan for healthcare costs before Medicare eligibility at 65 - this is often the biggest retirement expense surprise.
- 💡Consider delaying Social Security to age 70 if possible - benefits increase 8% per year after full retirement age.
- 💡Review and rebalance your portfolio annually to maintain your target asset allocation.
- 💡Don't forget about your old 401(k)s - consider rolling them into an IRA for easier management and often lower fees.
- 💡Use a Roth conversion ladder in lower-income years to pay taxes now at lower rates rather than later at potentially higher rates.
- 💡Consider a Health Savings Account (HSA) as a stealth retirement account - triple tax advantage and can be used for any expense after 65.
- 💡Plan for 30+ years in retirement - people consistently underestimate their life expectancy and risk running out of money.
- 💡Automate your contributions - set up automatic transfers so saving happens before you can spend the money.
- 💡Keep 3-6 months of emergency fund separate from retirement savings to avoid early withdrawals during financial stress.
- 💡Consider longevity insurance (deferred income annuities) for protection against outliving your savings.
- 💡Factor in inflation when planning - $1 million in 30 years will only buy about half of what it does today at 3% inflation.
- 💡Use the "Rule of 72" to estimate doubling time: divide 72 by your expected return rate (72/7=10.3 years to double at 7%).
- 💡Consider part-time work in early retirement - even modest income dramatically reduces how much you need from savings.
- 💡Review beneficiary designations annually - retirement account beneficiaries override your will.
- 💡Understand the "retirement smile" - spending typically decreases in mid-retirement before rising again for healthcare costs in late retirement.
- 💡Build in buffer for sequence of returns risk - entering retirement during a market downturn can significantly impact long-term sustainability.
Frequently Asked Questions
Financial experts recommend saving 10-15% of your gross income for retirement, including any employer match. If you're starting late (after 40), aim for 15-20%. At minimum, save enough to get your full employer match. The exact amount depends on your current age, savings, and retirement goals - use this calculator to find your specific target.
