How This Retirement Calculator Works
This calculator projects how much you could have saved by retirement, based on your current savings, monthly contributions, years until retirement, and an assumed annual investment return. It also estimates a sustainable monthly income using the widely referenced "4% rule."
What Is the 4% Rule?
The 4% rule is a common retirement planning guideline suggesting you can withdraw 4% of your retirement savings in the first year, then adjust for inflation each year after, with a low risk of running out of money over a 30-year retirement. It's a starting point for planning, not a guarantee — your actual safe withdrawal rate depends on market conditions, life expectancy, and your investment mix.
Why Contributing Early Makes Such a Big Difference
Retirement savings grow through compound interest — the earlier you start contributing, the more time your money has to grow. Someone who starts at 25 typically needs to save far less per month than someone who starts at 40 to reach the same retirement goal, simply because of the extra years of compounding.
Things This Calculator Doesn't Account For
This is a simplified projection. It doesn't factor in inflation, taxes, employer matching contributions, Social Security or pension income, or changes to your contribution amount over time. Use it as a directional estimate, and consider speaking with a financial advisor for a full retirement plan.
Frequently Asked Questions
What return rate should I use?
Many long-term investors use 6-8% as a rough estimate for diversified stock market portfolios, based on historical averages. More conservative portfolios (bonds, cash) would use a lower rate.
Does this account for inflation?
No, the projected values are in today's dollars without adjusting for future inflation. Keep in mind that $1 million in 30 years will have less purchasing power than $1 million today.
Should I include my employer's 401(k) match?
Yes — if your employer matches contributions, add that matched amount to your monthly contribution figure for a more accurate projection, since it's essentially free money added to your savings.