Retirement Calculator

Planning for a Secure Retirement

Retirement planning is one of the most important financial goals. Starting early and contributing consistently can mean the difference between comfortable retirement and financial stress. This calculator shows how your retirement savings will grow based on current savings, monthly contributions, and expected returns.

How Much Do You Need to Retire?

The 4% Rule

A common guideline: save 25× your annual expenses for retirement. Withdraw 4% per year, and your money should last 30+ years.

• $40,000/year expenses = $1,000,000 needed
• $60,000/year expenses = $1,500,000 needed
• $80,000/year expenses = $2,000,000 needed

The 10× Rule

Save 10× your final salary by retirement. If you earn $75,000 before retiring, aim for $750,000 in retirement savings.

Retirement Savings Benchmarks by Age

Age 30: 1× annual salary ($60K salary = $60K saved)

Age 40: 3× annual salary

Age 50: 6× annual salary

Age 60: 8× annual salary

Age 67: 10× annual salary

Retirement Account Types

401(k) / 403(b) (Employer Plans)

• Contribution limit: $23,000 (2024), $30,500 if 50+
• Employer match: Free money! Always contribute enough to get full match
• Tax benefit: Contributions reduce current taxable income
• Withdrawal: Taxed as ordinary income in retirement

Traditional IRA

• Contribution limit: $7,000 (2024), $8,000 if 50+
• Tax benefit: Contributions may be tax-deductible
• Best for: Those without 401(k) or maxing out 401(k)
• Withdrawal: Taxed as ordinary income

Roth IRA

• Contribution limit: $7,000 (2024), $8,000 if 50+
• Tax benefit: No deduction now, but withdrawals are tax-free in retirement
• Best for: Young workers in low tax brackets
• Income limits: Phaseout starts at $146,000 (single), $230,000 (married)

SEP IRA / Solo 401(k) (Self-Employed)

• SEP IRA limit: $69,000 or 25% of compensation
• Solo 401(k) limit: $69,000 total ($23,000 employee + profit sharing)
• Best for: Self-employed, freelancers, business owners

Example Scenarios

Starting at Age 25

Current savings: $5,000, Monthly: $500, Rate: 8%, Retire at 65

• Years saving: 40
• Total contributed: $245,000
• Final balance: $1,745,000
• Investment growth: $1,500,000 (86% of total!)

Starting at Age 35

Current savings: $30,000, Monthly: $750, Rate: 8%, Retire at 65

• Years saving: 30
• Total contributed: $300,000
• Final balance: $1,341,000
• Investment growth: $1,011,000 (75% of total)

Lesson: Starting 10 years earlier with less monthly contribution yields $400,000 more!

Social Security Benefits

While this calculator shows personal savings, don't forget Social Security:

• Average benefit: $1,800-$2,000/month
• Maximum benefit: $4,873/month (high earners)
• Early filing (62): Reduced benefits (70-75% of full)
• Full retirement age: 66-67 depending on birth year
• Delayed filing (70): Increased benefits (124% of full)

Investment Strategy by Age

Ages 20-40 (Aggressive Growth)

• 90% stocks, 10% bonds
• Target return: 9-10%
• Focus: Maximum growth, ignore volatility
• Examples: S&P 500 index funds, total market funds

Ages 40-55 (Balanced Growth)

• 70% stocks, 30% bonds
• Target return: 7-8%
• Focus: Growth with some stability
• Examples: Target-date funds, balanced funds

Ages 55-65 (Conservative Growth)

• 50% stocks, 50% bonds
• Target return: 5-6%
• Focus: Preserve capital, reduce volatility
• Examples: Bond funds, dividend stocks, stable value funds

Age 65+ (Capital Preservation)

• 30% stocks, 70% bonds/cash
• Target return: 3-4%
• Focus: Generate income, protect principal
• Examples: Treasury bonds, CDs, dividend aristocrats

Catch-Up Strategies if Behind

1. Maximize catch-up contributions (50+): Extra $7,500 to 401(k), $1,000 to IRA
2. Delay retirement: Each year working adds to savings and reduces years needing income
3. Delay Social Security: Waiting until 70 increases benefit by 24%
4. Reduce expenses: Downsize home, relocate to lower cost area
5. Work part-time in retirement: Even $1,000/month significantly extends savings

Common Retirement Planning Mistakes

1. Starting too late: Every year delayed costs tens of thousands in lost growth
2. Not maximizing employer match: Leaving free money on the table
3. Cashing out 401(k) when changing jobs: Loses growth and pays penalties
4. Too conservative too early: Missing growth opportunities in 20s-30s
5. Too aggressive too late: Risk losing principal when no time to recover
6. Ignoring inflation: $1 million today needs $1.8 million in 20 years (3% inflation)
7. Underestimating longevity: Plan for living to 90+

Required Minimum Distributions (RMDs)

At age 73, you must start withdrawing from traditional IRAs and 401(k)s:

• Calculated based on account balance and life expectancy
• Failure to withdraw: 25% penalty on amount not withdrawn
• Roth IRAs have no RMDs during owner's lifetime
• Plan for RMDs to avoid unexpected tax burden