Retirement Calculator

Planning Your Retirement

Retirement planning is one of the most important financial decisions you will make. The earlier you start, the more time your money has to grow through compound interest. Even small, consistent contributions can build substantial wealth over decades. A well-planned retirement means financial security, flexibility, and peace of mind in your golden years. The difference between starting at 25 versus 35 can be hundreds of thousands of dollars. Read our complete retirement planning guide →

The 4% Rule

The 4% rule is a popular retirement planning guideline developed from historical stock and bond market data. It suggests that you can safely withdraw 4% of your retirement savings in the first year of retirement, then adjust that amount for inflation each year, without running out of money for at least 30 years. For example, with $1 million saved, you could withdraw $40,000 in your first year of retirement. This rule provides a practical framework for determining how much you need to save and works in reverse: multiply your desired annual income by 25 to find your savings target.

Understanding Retirement Accounts

401(k): Employer-sponsored plan with high contribution limits ($24,000 in 2026, plus $7,750 catch-up if 50+). Many employers match contributions up to 3-6% of salary. Traditional 401(k)s are tax-deferred; Roth 401(k)s grow tax-free.

IRA: Individual Retirement Account you open yourself at any brokerage. Contribution limit is $7,000 ($8,000 if 50+). Traditional IRAs may be tax-deductible; Roth IRAs offer tax-free growth and withdrawals. IRAs typically offer more investment choices than most 401(k)s.

Inflation's Impact on Retirement

Inflation erodes purchasing power over time. What costs $1 today will cost approximately $1.81 in 20 years at 3% annual inflation. A comfortable $60,000/year retirement income today needs to be $108,600 in 30 years to maintain the same purchasing power. This is why our calculator shows both nominal and inflation-adjusted values - plan for what your money will actually buy, not just the number. Learn how inflation affects your savings →

Social Security Considerations

Social Security provides a foundation but should not be your only retirement income source. The average benefit is about $1,900/month. You can claim as early as 62 (with permanently reduced benefits of about 30%) or delay until 70 (with 8% annual increases). Each year you delay past full retirement age increases your benefit by 8% - one of the best guaranteed returns available. Consider Social Security as a supplement to your personal savings, not a replacement.

How Much Do You Need?

A common rule of thumb is to aim for 25 times your desired annual retirement income. Want $60,000 per year? Target $1.5 million in savings. Most experts recommend replacing 70-80% of your pre-retirement income to maintain your lifestyle. Use our calculator above to model different scenarios based on your current age, savings rate, and target retirement age. For a complete breakdown, see our guide: How Much Do I Need to Retire? →

Building Your Retirement Strategy

A solid retirement strategy combines multiple elements: maximize tax-advantaged accounts (401(k), IRA, HSA), maintain a diversified portfolio, minimize high-interest debt, and create a realistic budget that includes consistent savings. Use our Compound Interest Calculator to see how different contribution levels grow over time, and our Investment Calculator for detailed portfolio projections. Understanding tax fundamentals helps you choose between traditional and Roth accounts.

For retirees already in retirement, check out our retiree financial planning tips and estate planning guide. Couples should review our couples budgeting guide for joint retirement planning strategies. If you're weighing whether to pay off debt before boosting retirement savings, our debt vs. invest decision guide provides clear frameworks.

Don't forget to calculate your full income picture using our Salary Calculator and Tax Calculator to understand how retirement contributions affect your take-home pay. Building an emergency fund alongside retirement savings ensures you won't need to tap into retirement accounts early and face penalties. See how compound interest accelerates your savings and track your full financial picture with the net worth guide.