Retirement Calculator

A retirement calculator compares two numbers: what your savings could grow to by retirement, and the nest egg your income goal needs. The first comes from FV = P(1 + i)^N + C((1 + i)^N − 1) ÷ i. For example, $50,000 plus $500 a month at an assumed 6% a year grows to about $803,386.28 in 30 years.

How to use the retirement calculator

1. Choose a tab. Retirement plan checks whether you are on track. How long it lasts and Income from savings are for money you already have.
2. Enter your ages, current savings, what you save each month, your pay and your employer match (for example 50% of what you save, up to 6% of pay).
3. Set your income goal in today’s dollars, either as a percent of your pay or as dollars a year. Add other income such as your Social Security estimate or a pension, and the age it starts.
4. Type your own assumptions for returns, inflation and raises; try a cautious set and a hopeful set.
5. Read the projection, the nest egg needed, the shortfall or surplus and the monthly saving that would close the gap. Open Show steps for the working, and the year-by-year table for every age.

Retirement savings formula (future value)

Savings grow in two parts. Your current balance grows as a lump sum, and your monthly deposits grow as an annuity:

FV = P × (1 + i)^N + C × ((1 + i)^N − 1) ÷ i

• P is what you have saved today.
• C is the monthly deposit, your own saving plus any employer match.
• i is the monthly return: the yearly rate ÷ 12. At 6%, i = 0.005.
• N is the number of months until retirement: years × 12.

With $50,000, $500 a month, 6% and 30 years, N = 360 and (1.005)³⁶⁰ ≈ 6.022575. The savings grow to 50,000 × 6.022575 ≈ $301,128.76. The deposits grow to 500 × (6.022575 − 1) ÷ 0.005 ≈ $502,257.52. The total is $803,386.28, from $230,000 that you put in.

Employer match: how it adds up

Many employers match part of what you put into a workplace plan, up to a limit. The SEC’s investor education site points out that an employer who adds 50 cents for every dollar you save gives you an immediate 50 percent return on that money. With $75,000 of pay and a match of 50% up to 6% of pay, the match applies to the first $4,500 you save each year ($375 a month). Saving that much earns $2,250 a year from your employer. Check your own plan’s rules, because match formulas differ.

How much income you will need

The U.S. Department of Labor says experts estimate you will need 70 to 80 percent of your preretirement income to keep your standard of living. That is why the example uses 75% of pay.

Enter your goal in today’s dollars. The calculator raises it with your inflation rate, so the goal keeps the same buying power every year. Then it subtracts your other income. The calculator does not estimate Social Security. Get your personal estimate from SSA’s my Social Security retirement calculator, which shows amounts for claiming between 62 and 70 from your own earnings record, and type the amount for the age you plan to claim.

Annuity drawdown formula: the nest egg you need

In retirement the money flows the other way. If you withdraw W at the start of each month for n months, the balance you need today is the present value of an annuity due:

B = W × (1 + j) × (1 − (1 + j)⁻ⁿ) ÷ j

Because withdrawals rise with inflation, use the real (after-inflation) monthly return: j = (1 + r ÷ 12) ÷ (1 + inflation)^1/12 − 1. At 5% a year and 3% inflation, j ≈ 0.0016962, about 2.05% a year after inflation.

Worked example. How much could $1,000,000 pay each month for 30 years? Here n = 360, and the annuity factor is (1.0016962) × (1 − 1.0016962⁻³⁶⁰) ÷ 0.0016962 ≈ 269.7118. Then W = 1,000,000 ÷ 269.7118 ≈ $3,707.66 a month in today’s dollars, about $44,491.94 a year, with each payment raised for inflation. To find the nest egg for a goal, multiply the monthly amount you need from savings by the annuity factor.

How long will savings last?

Solving the same formula for n gives the number of months the money lasts:

n = −ln(1 − B × j ÷ (W × (1 + j))) ÷ ln(1 + j)

Take $500,000 and withdraw $3,000 a month, rising with 3% inflation, while the money earns 5%. Then n ≈ 195.7 months, so the savings cover 16 years and 3 months of withdrawals. Starting at 65, they run out at about 81. If B × j is at least W × (1 + j), the real return covers each withdrawal and the balance never runs out.

Here is the same $500,000, earning a steady 5% a year with 3% inflation, at different first-year withdrawal rates:

The 4% rule and safe withdrawal rates

The table assumes the same return every year. Real markets do not behave that way, and that is what the research on withdrawal rates studies. In 1994 the financial planner William Bengen tested withdrawals against US stock, bond and inflation data from 1926 on. He found that taking 4% of the starting balance in the first year, then raising that dollar amount for inflation each year, had never exhausted a portfolio split between stocks and bonds in under 33 years. That result became known as the 4% rule.

A 1998 study in the AAII Journal (often called the Trinity study) tested withdrawal rates over 15 to 30 years. It found that rates of 3% to 4% produced high success rates for portfolios mostly in stocks, even with inflation increases. Both describe past markets, not guarantees. The AAII article calls a withdrawal rate “a matter of planning” rather than “a matter of contract” and expect mid-course corrections. The results also leave out taxes and fees. Use 4% as a reference point, and check your plan again every few years.

Nominal vs real values

Nominal (future) dollars are the numbers your statements will show. Real dollars, or today’s dollars, divide by inflation so you can compare buying power. With 3% inflation for 32 years, a balance of $1,337,269.99 at 67 is worth about $519,311.46 in today’s money.

Common retirement planning mistakes

• Mixing nominal and real numbers. A goal in today’s dollars must be compared with savings in today’s dollars.
• Planning to an average age. SSA’s life expectancy calculator gives an average, and many people live longer, so plan to a later age.
• Treating the assumed return as a promise. The SEC notes that all investments involve some risk and that large company stocks have lost money in about one out of every three years.
• Forgetting taxes. Withdrawals from pre-tax accounts are taxed, so you may need more than your spending goal.

Sources

Checked in November 2026.

• Social Security Administration: my Social Security retirement calculator
• Social Security Administration: Benefit calculators
• Social Security Administration: Life expectancy calculator
• U.S. Department of Labor: Top 10 Ways to Prepare for Retirement
• SEC Investor.gov: Free Money! (employer matching)
• SEC Investor.gov: What is Risk?
• Bengen, W. P. (1994). Determining Withdrawal Rates Using Historical Data. Journal of Financial Planning (FPA reprint)
• AAII Journal (February 1998): Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable

Results from this calculator are estimates based on the assumptions you enter. They are not financial advice.

Retirement savings practice quiz: 10 questions

Test yourself with 10 multiple-choice questions. Choose an answer and press Submit to see if you are right and why. Your score appears at the end.

Frequently asked questions

How much do I need to retire?

It depends on the income you want, your other income and how long the money must last. Multiply the monthly amount you need from savings by the annuity factor for your retirement length. For example, $3,707.66 a month for 30 years at 5% with 3% inflation needs about $1,000,000.

What is the 4% rule?

It means taking 4% of your savings in the first year of retirement, then raising that amount for inflation each year. William Bengen's 1994 study found this lasted at least 33 years in every historical period he tested from 1926 on. It is a rule of thumb from past data, not a guarantee.

How long will $500,000 last in retirement?

Withdrawing $3,000 a month, rising with 3% inflation, from $500,000 that earns a steady 5% lasts about 16 years 3 months. At $1,666.67 a month (4% a year) it lasts about 34 years 10 months. Use the How long it lasts tab for your own numbers.

How much should I save each month for retirement?

The Retirement plan tab solves for it. It finds the monthly saving that makes your projected balance equal the nest egg your goal needs, and it counts your employer match up to its limit. In the example, that is $892.14 a month.

Does this calculator include Social Security?

Only the amount you type in. Benefits depend on your own earnings record, so get your estimate from SSA's my Social Security retirement calculator and enter it as other income, with the age you plan to claim.

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