How to use the retirement calculator
- Enter your current age and the age you plan to retire.
- Add what you have already saved for retirement — 401(k), IRA and other investment accounts.
- Enter how much you contribute each month, including any employer match.
- Set an expected annual return and inflation rate. The defaults (7% and 2.5%) are common long-term planning assumptions.
- Review your projected balance, its value in today's dollars and the income it could support.
How the projection works
Your savings grow with compound returns, and every monthly contribution starts growing as soon as it is invested:
Here P is your current savings, C is the monthly contribution, r is the monthly return and n is the number of months until retirement. To show what that money will actually buy, the calculator then divides by cumulative inflation: today's value = future value ÷ (1 + inflation)^years.
Example
A 30-year-old with $25,000 saved who invests $500 a month at a 7% average return would have about $1,122,621 at 65. That sounds like a lot, but with 2.5% inflation it is worth roughly $473,040 in today's dollars — enough for about $18,900 a year of income under the 4% rule, on top of Social Security.
Starting early matters enormously. Investing $500 a month from zero at 7% grows to about $855,700 if you start at 30, but only about $391,500 if you start at 40 — less than half, even though you contributed only a third less.
What is the 4% rule?
The 4% rule comes from studies of historical U.S. market returns in the 1990s, including William Bengen's research and the "Trinity Study." It suggests that withdrawing 4% of your savings in the first year of retirement, then adjusting that amount for inflation each year, has historically lasted about 30 years in most market conditions. It is a planning shortcut, not a guarantee; many planners now use 3–4% for longer or early retirements.
How much should I have saved for retirement?
A widely cited guideline from Fidelity is to aim for about 1× your salary by 30, 3× by 40, 6× by 50, 8× by 60 and 10× by 67. Your own target depends on when you retire, your expected Social Security or pension income, and the lifestyle you want.
Ways to boost your retirement savings
- Get the full employer match in your 401(k) — it is an instant return on your money.
- Use tax-advantaged accounts such as a 401(k), 403(b), traditional IRA or Roth IRA.
- Raise contributions with every pay rise, even by 1% of your salary at a time.
- Keep fees low. A 1% annual fee can reduce your final balance by more than 20% over a few decades.
- Stay invested through market dips rather than selling.
See how compounding works in detail with the compound interest calculator.
Frequently asked questions
How much money do I need to retire?
A common approach is to estimate your yearly spending in retirement, subtract expected Social Security or pension income, and multiply the gap by 25 (the inverse of the 4% rule). For example, a $30,000 yearly gap needs about $750,000.
What rate of return should I use for retirement planning?
Many planners use 5–7% a year for a diversified stock-heavy portfolio before inflation, and lower figures closer to retirement as portfolios become more conservative. Returns vary from year to year and are never guaranteed.
Why show the result in today's dollars?
Because prices rise over time. $1 million in 35 years will buy much less than $1 million today. Adjusting for inflation shows what your savings will really be worth.
Does this include Social Security?
No. The calculator projects only your own savings. Social Security benefits would come on top; you can estimate yours at ssa.gov.
Is it too late to start saving at 40 or 50?
No. Starting later means you may need to save more each month, but catch-up contributions are allowed in 401(k) plans and IRAs from age 50, and even 15–20 years of compounding makes a big difference.
Results are estimates for educational purposes and are not financial advice. Actual loan terms, rates, taxes and fees vary by lender and location — confirm figures with a qualified professional before making decisions.
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