How much money do I need to retire?

A common rule of thumb is to save 25 times your desired annual retirement income (based on the 4% rule). For example, if you want $60,000 per year in retirement, you would need $1.5 million saved. However, the actual amount depends on your lifestyle, healthcare costs, Social Security benefits, pension, and how long you expect to live in retirement.

The 4% rule is a widely-used retirement planning guideline suggesting you can withdraw 4% of your portfolio in the first year of retirement, then adjust for inflation each subsequent year, with a high probability of not running out of money over a 30-year retirement. This calculator uses the 4% rule to estimate your monthly retirement income from your projected savings.

What rate of return should I expect?

The historical average annual return for the S&P 500 is approximately 10% before inflation, or about 7% after inflation. A diversified portfolio of stocks and bonds might return 6-8% annually. This calculator uses nominal returns (before inflation). For a more conservative estimate, use 5-6%. For an aggressive stock-heavy portfolio, 8-10% may be appropriate.

How much should I contribute to retirement each month?

Financial advisors commonly recommend saving 10-15% of your gross income for retirement. If your employer offers a 401(k) match, contribute at least enough to get the full match. The earlier you start, the less you need to save monthly due to compound growth. Use this calculator to experiment with different contribution levels to find what works for your goals.

Does this calculator account for inflation?

This calculator shows nominal (non-inflation-adjusted) projections. To account for inflation, you can use a 'real' return rate by subtracting the expected inflation rate (typically 2-3%) from your expected return rate. For example, if you expect 7% returns and 2.5% inflation, enter 4.5% for an inflation-adjusted projection.

When should I start saving for retirement?

The best time to start saving for retirement is as early as possible. Thanks to compound interest, money saved in your 20s has decades more time to grow than money saved in your 40s or 50s. Someone who starts saving $500/month at age 25 will have significantly more at 65 than someone who starts saving $1,000/month at age 40, even though the late starter contributes more total.

CalcHive

Retirement Calculator

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Plan your retirement by calculating projected savings at retirement age. Enter current savings, monthly contributions, and expected returns. See estimated monthly retirement income using the 4% rule.

Current Age

Retirement Age

Current Savings

Monthly Contribution

Expected Annual Return

Projected Savings at Retirement

$2,250,731

Total Contributions

$470,000

Investment Growth

$1,780,731

Monthly Income (4% Rule)

$7,502

Years to Retirement

How to Use Retirement Calculator

Enter your current age and desired retirement age.
Input your current retirement savings balance.
Set your planned monthly contribution amount.
Enter the expected annual rate of return on investments.
View your projected savings, total contributions, and investment growth.
Check the estimated monthly retirement income based on the 4% rule.
Expand the year-by-year breakdown to see growth at each age.

How Retirement Savings Are Projected

This calculator projects your retirement savings by applying compound growth to your current savings and regular contributions. Each year, your existing balance grows by the expected annual return rate, and your monthly contributions (totaled annually) are added.

The growth calculation uses a mid-year contribution assumption, meaning contributions made throughout the year earn approximately half a year of returns on average. This provides a more realistic estimate than assuming all contributions are made at the beginning or end of the year.

The monthly retirement income estimate uses the 4% rule, which suggests you can safely withdraw 4% of your portfolio annually in retirement. This is divided by 12 to give a monthly figure. The 4% rule was derived from historical market data and assumes a diversified portfolio and a 30-year retirement period.