Retirement Calculator

How Much Do You Need to Retire?

The most common retirement planning heuristic is the 4% Rule, developed from the Trinity Study (1998, updated multiple times since). It states that a retiree can withdraw 4% of their portfolio in year one, then adjust for inflation each year, and the portfolio has historically lasted 30+ years with a high probability of success across stock/bond mixes.

Under the 4% rule, your retirement number is simple: multiply your desired annual income by 25. Need $60,000/year? You need $1.5 million. Need $80,000? You need $2 million. This provides a useful starting target — though your actual number depends on Social Security income, pension, healthcare costs, and how long you expect to live.

The Role of Inflation in Retirement Planning

Inflation is retirement planning's silent killer. At 3% average inflation, your purchasing power halves every 24 years. $60,000 of annual spending today will feel like $108,000 by the time a 35-year-old reaches 65. This is why this calculator inflates your income target to future dollars before calculating your nest egg goal.

In retirement, a real (inflation-adjusted) return matters more than nominal return. If your portfolio earns 7% but inflation runs 3%, your real return is about 4% — and that's what actually sustains withdrawals. This is why bond-heavy portfolios often fail in long retirements: they earn less than inflation after tax.

The 4% Rule — Limitations

The 4% rule was calibrated for 30-year retirements using U.S. stock/bond returns from 1926–1995. It's a useful benchmark but not a guarantee. Key caveats:

• Early retirees (40s–50s): A 40+ year retirement may require a lower withdrawal rate — 3–3.5% is safer
• Sequence-of-returns risk: A market crash early in retirement is far more damaging than one later — timing matters
• International stocks underperform U.S. stocks historically: Globally diversified portfolios may warrant a lower rate
• Healthcare inflation runs higher than CPI: Especially relevant post-65; healthcare costs often exceed 3% annual increases

Retirement Account Types Compared

The account you save in matters as much as how much you save:

• Traditional 401(k)/IRA: Pre-tax contributions reduce taxable income now; withdrawals taxed as ordinary income in retirement. Best if you expect a lower tax bracket in retirement.
• Roth 401(k)/IRA: After-tax contributions; growth and withdrawals completely tax-free. Best if you expect a higher bracket in retirement, or want tax flexibility.
• HSA (Health Savings Account): Triple tax advantage — pre-tax contributions, tax-free growth, tax-free withdrawals for healthcare. After 65, withdrawals for any purpose are taxed like a traditional IRA. The best retirement account most people ignore.
• Brokerage account: No tax advantages, but no restrictions on withdrawal timing. Useful for early retirement (before 59½) or when you've maxed tax-advantaged accounts.

Social Security — How It Fits In

Social Security replaces roughly 40% of pre-retirement income for average earners, less for higher earners. In 2026, the maximum monthly benefit at full retirement age (67 for those born after 1960) is approximately $3,822/month — or $45,864/year. Taking it at 62 reduces this by up to 30%; delaying to 70 increases it by 24% versus full retirement age.

Every year you delay Social Security past 62 increases your benefit by 6–8%. Waiting from 62 to 70 can more than double your monthly check. For those in good health, delaying typically pays off by your late 70s. Factor your estimated Social Security benefit into your retirement income calculation to reduce how much your portfolio needs to produce.

Retirement Savings Benchmarks by Age

Fidelity's widely-used savings benchmarks (as multiples of annual salary):

• By 30: 1× salary saved
• By 35: 2× salary
• By 40: 3× salary
• By 50: 6× salary
• By 55: 7× salary
• By 60: 8× salary
• At retirement (67): 10× salary

These assume you'll spend roughly 80% of pre-retirement income in retirement and retire at 67. If you want to retire earlier or spend more, scale up accordingly.

Frequently Asked Questions

What return rate should I use? The S&P 500 has returned approximately 10% annually (7% after inflation) over the long term. A 60/40 stock/bond portfolio averages around 7% nominal. Use 6–7% for a conservative projection, 7–8% if you plan to stay aggressive. This calculator uses your input as-is (nominal return).

What if I start late? Increasing your savings rate dramatically changes outcomes. Going from 10% to 20% of income saved can cut years off your retirement timeline. Starting at 45 instead of 35 is painful but not hopeless — calculate the monthly contribution needed and commit to it.

Is $1 million enough to retire? At 4% withdrawal, $1M produces $40,000/year. Combined with average Social Security (~$20,000/year), that's $60,000/year — comfortable in a low cost-of-living area, tight in an expensive city. Your actual number depends entirely on your expected lifestyle costs.

Should I pay off debt before investing for retirement? Generally: invest enough to capture the full employer 401(k) match first (it's an instant 50–100% return), then aggressively pay high-interest debt (>7%), then return to retirement investing. Low-interest debt (mortgage <5%) is fine to carry while investing.