How much do I need to save for retirement?

Financial experts generally recommend saving 10-15% of your income for retirement. The exact amount depends on your current age, desired retirement lifestyle, expected expenses, and other factors.

What is the 4% rule for retirement?

The 4% rule suggests that you can safely withdraw 4% of your retirement savings in the first year of retirement, then adjust that amount for inflation in subsequent years without running out of money.

Retirement Calculator

Plan your financial future with our comprehensive retirement calculator. Calculate how much you need to save for a comfortable retirement based on your current situation, goals, and investment strategy.

Current Age: Your age today (18-100 years)

Retirement Age: When you plan to retire (50-80 years)

Current Savings ($): Total amount currently saved for retirement

Monthly Contribution ($): Amount you plan to save each month

Expected Annual Return (%): Expected investment return (typically 6-8%)

Inflation Rate (%): Expected annual inflation rate (typically 2-4%)

Life Expectancy: Expected years you'll live (affects retirement duration)

Desired Monthly Income ($): Monthly income needed in retirement

Your Retirement Projection Results

Total Savings at Retirement:

Monthly Income Available:

Years of Retirement Funding:

0 years

Retirement Readiness:

Not Calculated

Share Your Results:

How to Use the Retirement Calculator

Enter your current age - This helps determine how many years you have until retirement.
Set your retirement age - The age when you plan to stop working.
Input current savings - Include all retirement accounts, 401(k), IRA, and other investments.
Monthly contribution - How much you plan to save each month going forward.
Expected return rate - Conservative estimate is 6-7%, aggressive is 8-10%.
Inflation rate - Historical average is around 3% annually.
Life expectancy - Consider family history and health factors.
Desired income - Monthly income you want in retirement (consider 70-80% of current income).

About This Retirement Calculator

Our retirement calculator uses compound interest formulas and financial planning principles to project your retirement savings growth. The calculator considers inflation, investment returns, and your contribution schedule to provide realistic estimates for your retirement planning.

This tool helps you understand whether you're on track for retirement and how different variables affect your financial future. You can adjust various parameters to see how changes in savings rate, investment returns, or retirement age impact your retirement readiness.

Calculation Steps

1. Future Value of Current Savings

FV = PV × (1 + r)^n

Where PV is present value, r is annual return rate, n is years to retirement

2. Future Value of Monthly Contributions

FV = PMT × [((1 + r)^n - 1) / r]

Where PMT is monthly payment, calculated for monthly compounding

3. Inflation-Adjusted Income

Real Income = Nominal Income / (1 + inflation)^years

Adjusts future income needs for purchasing power

Formula Used

Total Retirement Savings:

Total = Current_Savings × (1 + Annual_Return)^Years + Monthly_Contribution × [((1 + Monthly_Return)^Months - 1) / Monthly_Return]

Monthly Retirement Income (4% Rule):

Monthly_Income = (Total_Savings × 0.04) / 12

Use Cases / Applications

Retirement Planning - Determine if you're saving enough for retirement
Goal Setting - Set realistic savings targets based on desired retirement lifestyle
Investment Strategy - Compare different return scenarios and risk levels
Career Planning - Evaluate how retirement age affects savings requirements
Financial Advice - Use projections to make informed financial decisions
401(k) Planning - Optimize employer contribution matching
Catch-up Contributions - Plan additional savings if behind on retirement goals

Examples

Example 1: Young Professional

Age: 25, Retirement: 65, Current Savings: $10,000

Monthly Contribution: $300, Expected Return: 8%

Result: Total savings of approximately $1.2 million at retirement

Example 2: Mid-Career Professional

Age: 40, Retirement: 65, Current Savings: $150,000

Monthly Contribution: $800, Expected Return: 7%

Result: Total savings of approximately $1.1 million at retirement

Example 3: Late Starter

Age: 50, Retirement: 67, Current Savings: $75,000

Monthly Contribution: $1,500, Expected Return: 6%

Result: Total savings of approximately $550,000 at retirement

Frequently Asked Questions (FAQ)

How much should I save for retirement?

Financial experts recommend saving 10-15% of your gross income for retirement. However, this can vary based on when you start saving, your retirement goals, and other factors.

What is the 4% withdrawal rule?

The 4% rule suggests you can withdraw 4% of your retirement savings in the first year of retirement, then adjust for inflation each year, without running out of money for 30 years.

How accurate are retirement calculations?

Retirement calculations provide estimates based on your inputs. Actual results may vary due to market volatility, changing personal circumstances, and economic factors.

Should I include Social Security in my retirement planning?

Yes, but it's wise to be conservative. Social Security provides a foundation, but you should not rely on it entirely for your retirement income.

What if I'm behind on retirement savings?

If you're behind, consider increasing contributions, working longer, taking advantage of catch-up contributions (if 50+), or adjusting retirement lifestyle expectations.