Retirement Calculator

The pot is an ordinary annuity: each month's balance earns one twelfth of the yearly return, then the deposit is added. The drawdown runs the same way in reverse - the balance earns the retirement return, the withdrawal comes out, and the withdrawal itself rises once a year with inflation. Today's-money figures divide by (1 + inflation) raised to the number of years.

How much do I need to retire?

A common target is 25 times the yearly spending you want, which is the 4 percent rule turned around. If you want 54,000 a year, that is about 1.35 million. Social Security reduces what you need from savings, so subtract your expected benefit from the spending figure first.

Is 7 percent a fair return to assume?

It is roughly the long-run US stock market average after inflation is not yet taken off. Because this page takes inflation off separately, 7 percent growth with 2.5 percent inflation is a reasonable middle assumption. Try 5 percent to see the pessimistic case.

Why is the number in today's money so much smaller?

Because a dollar in 30 years buys about half what it buys now at 2.5 percent inflation. The large headline figure is real, but it will not feel large by the time you have it, which is why the second line matters more.

What if I am starting late?

Time matters more than amount, so the honest answers are to save more, work a little longer, or plan to spend less. Adding five years to the retirement age usually moves the result further than raising the monthly contribution by a few hundred.