Retirement Calculator

1. Enter your current age, your planned retirement age and what you have saved so far.
2. Add your monthly contribution and an expected return.
3. Enter the yearly income you want from savings in todays money, plus inflation and a withdrawal rate.
4. Compare the projected nest egg with the amount needed and note the monthly saving required.

What each figure tells you:

A retirement calculator answers the question behind every pension statement: will I have enough? It works in two halves. First it projects how large your savings will grow by the day you retire. Then it estimates how large they need to be to pay the income you want for the rest of your life.

The second half uses a safe withdrawal rate. The well-known 4 percent rule comes from research into historical market returns, which found that withdrawing about 4 percent of a balanced portfolio in the first year, then adjusting for inflation, rarely ran out over 30 years. Dividing your income goal by that rate gives a target nest egg, about 25 times your yearly spending at 4 percent.

This tool covers the saving years. Once you retire, the retirement withdrawal calculator shows how long a given pot lasts as you draw it down.

It grows your savings and contributions forward, grows your income goal with inflation, and compares the two.

Here i is the monthly return and N the months to retirement. The target is I(1+f)^y / w for income I, inflation f, years y and withdrawal rate w.

1. Compound your current savings monthly until retirement.
2. Add the future value of your monthly contributions.
3. Inflate your income goal to retirement-day prices and divide by the withdrawal rate.
4. Solve for the monthly contribution that makes the projection equal the target.

You are 35 with 50,000 saved and put in 800 a month. You expect a 7 percent return, want 60,000 a year in todays money, assume 2.5 percent inflation and plan to retire at 65 using a 4 percent withdrawal rate.

After 30 years your savings are projected to reach about 1,381,802. But 60,000 of todays spending becomes about 125,854 a year by then, and at 4 percent that needs a nest egg of about 3,146,351. The shortfall is about 1,764,550, and closing it would take roughly 2,246 a month.

The figures look large because they are in future dollars. In todays money the projection is worth about 659,000. Retiring later, targeting less income, counting a pension or Social Security, or accepting a slightly higher withdrawal rate each shrink the gap.

Several calculators touch retirement, but they answer different questions.

For a simple projection without an income goal, the future value calculator is quicker.

Time

Every extra year of saving adds contributions and a year of compounding. Starting at 25 instead of 35 can nearly double the final pot.

Return Rate

A 1 percent difference in return over 30 years can change the result by a quarter or more.

Contribution Level

Raising contributions, especially to capture a full employer match, is the most controllable lever.

Inflation

Higher inflation raises the income you will need in future dollars and therefore the target.

Withdrawal Rate

A 3.5 percent rate is more cautious and needs a bigger pot; 5 percent needs less but raises the risk of running out.

Other Income

Pensions and state benefits reduce what your savings must provide. Subtract them from the income goal.

Setting a Contribution

Find the monthly amount that keeps you on track, and revisit it after pay rises.

Choosing a Retirement Age

Compare 60, 65 and 67 to see how a few more working years change the gap.

Annual Check-ups

Update your balance each year to catch a shortfall early, while there is time to fix it.

Testing Big Decisions

See how a career break, a house purchase or a lower return would affect your plan.

1. Ignoring Inflation

An income that feels comfortable today will buy far less in 30 years. Always plan in inflated or real terms consistently.

2. Assuming High Returns

Using 10 percent when a balanced portfolio may earn less makes the plan look safer than it is.

3. Forgetting Other Income

Leaving out a pension or Social Security overstates the shortfall. Subtract them from your goal.

4. Not Revisiting the Plan

Returns, pay and goals change. A plan checked once a decade can drift badly.

5. Missing the Employer Match

Not contributing enough to get the full match leaves free money on the table.

The projection is a straight-line estimate. Real markets rise and fall, and the order of returns matters.

A common estimate is 25 times the yearly income you want from savings, which matches a 4 percent withdrawal rate. This calculator also grows that income for inflation.

It suggests withdrawing 4 percent of your savings in the first year of retirement and adjusting for inflation after that, a pace that historically lasted around 30 years.

Many planners use 5 to 7 percent a year for a diversified portfolio before retirement. Use a lower figure if you want a more cautious plan.

It is shown in future dollars. Inflation over decades raises the income you will need, so the target grows too. The method line also shows the projection in todays money.

Yes, indirectly. Subtract the yearly amount you expect from those sources from your income goal before entering it.

It should. Enter the total going into your retirement accounts each month, including any employer contribution.

You can raise contributions, retire a little later, reduce your income goal or plan for part-time work. Try each in the calculator to see which closes the gap.

No. Contributions, growth and withdrawals may be taxed differently depending on the account. Treat the results as pre-tax estimates.

No. The calculation runs in your browser, and nothing you enter is sent anywhere unless you Save a result, which stays on this device only.

• Trinity study (Wikipedia).
• Four percent rule (Investopedia).
• Retirement planning (Wikipedia).