Work out how much you need to retire, how much to save to get there, how much you can spend once you stop working, and how long your savings will last.
The calculator works in two stages. While you are working, your balance grows each year with investment returns plus whatever you add. Once you retire, it pays for your spending: each month a withdrawal comes out, with the monthly amount rising with inflation once a year, and what is left keeps earning returns. The amount you need at retirement is the lump sum that would fund those inflation-adjusted withdrawals until your life expectancy, with the balance running down to about zero at the end.
A common rule of thumb is that retirees need roughly 70% to 80% of their pre-retirement income to keep the same standard of living, since work costs and saving for retirement drop away. That is only a starting point. If you expect to travel a lot, carry a mortgage into retirement, or face high healthcare costs, you may want a higher figure, and you can enter an exact yearly dollar amount instead.
Small changes in these two assumptions move the result a lot over decades. Returns on a diversified portfolio are never guaranteed, and a more cautious return is a reasonable choice as you near retirement. Inflation has historically run at around two to three percent a year in many economies, but it varies, so it is worth testing a higher rate to see how sensitive your plan is.
The main figures are in future dollars, meaning what the money will actually be worth in the year you retire. Where it matters, the calculator also shows today's-dollar equivalents so you can compare them with what things cost now.
The 4% rule is a quick shortcut that assumes a fixed withdrawal rate over roughly 30 years. This calculator instead projects your withdrawals month by month, raising them with inflation each year while the remaining balance keeps earning returns, so the answer adapts to your own retirement length and return assumptions.
Spending that rises with inflation is modeled as monthly withdrawals taken at the start of each month, with the monthly amount stepping up once a year. A fixed withdrawal that never increases is modeled at the end of each month. Real-world timing varies a little, so treat the results as estimates.
Taxes are not modeled, so results are before tax. Use the other income field for Social Security, a pension, or any other monthly income you expect after retiring, entered in today's dollars. It is adjusted for inflation and reduces how much you need to draw from savings.
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