Retirement Calculator
Plan your retirement with confidence. Calculate how much you need to save, project your nest egg growth, and find the monthly contribution to reach your goal.
๐ About Retirement Calculator
Retirement planning is one of the most important financial decisions you will make. The key variables are: how much you have saved now, how much you contribute monthly, your expected investment return, inflation rate, and how many years until retirement. Small changes to these variables have enormous compounding effects over decades.
๐ History
Modern retirement savings plans in the US were shaped by the Employee Retirement Income Security Act (ERISA) of 1974. The 401(k) was created in 1978 and became popular in the 1980s as companies shifted from pensions to employee-managed savings. The IRA (Individual Retirement Account) was also introduced in 1974.
๐ฏ Common Uses
- Early retirement planning
- 401(k) contribution decisions
- Savings goal setting
- Social Security timing
- Portfolio withdrawal planning
- Financial independence tracking
Frequently Asked Questions
โ How much do I need to retire?
A common rule is to save 25x your annual expenses (the 4% rule). If you need $50,000/year, aim for $1.25 million. Adjust for Social Security income and pension if applicable.
โ What is the 4% rule?
The 4% rule says you can safely withdraw 4% of your portfolio each year in retirement without running out of money over a 30-year retirement, based on historical market returns.
โ What rate of return should I use?
The US stock market has historically averaged about 10% annually before inflation (7% real return). A diversified portfolio of 60% stocks / 40% bonds averages about 6-8%.
โ How does inflation affect retirement savings?
Inflation reduces purchasing power over time. At 3% inflation, $1 today is worth only $0.55 in 20 years. This calculator accounts for inflation in its projections.