How much should you save for retirement?

Save enough to equal an amount that is between 70 and 85% of your income over the course of your life. A quick estimate would be to multiply your desired annual retirement income by 25, but this calculator will give you a more accurate result as it projects savings and expenses annually.

This is a guideline that says about 4% of your savings can be withdrawn in the first year of retirement and then the withdrawal factor adjusts to inflation. Historical data shows this method generally allows for savings to last approximately 30 years. This also forms the basis for the "25-times" rule, as 1 divided by 4% equals 25.

How much of your income should you save?

A common goal is to save about 15% of gross income including employer contributions. It's possible to meet this goal with less savings if you start earlier or retire later since both the length of time and amount invested in financial markets are important.

Is it possible to live on social security benefits in retirement?

This is usually not possible. Social security benefits cover about 40% of a typical worker's income, so the rest has to come from personal savings and pensions. By entering your expected benefits, a tool will calculate how much extra you need to save in order to make up for the shortfall.

How does inflation affect your retirement savings?

Because inflation increases the cost of living over time, you will need a larger amount of savings in the future to maintain your current standard of living. This calculator takes into account inflation when determining your target income and then estimates how much of your savings you'll have to draw down over time based on realistic returns. So the amount you'll need is likely higher than what your current expenses would suggest.

Retirement Calculator

Your details

Current age

Planned retirement age

Current retirement savings

Monthly contribution

Current annual income

Return and inflation assumptions

Other retirement income

Your retirement outlook

What you'll have at retirement

What you'll need

Surplus or shortfall

You have a projected gap. Saving about $1,060.93 a month, instead of your current amount, would close it and reach your $1,647,776.03 goal.

What you'll have at retirement

Monthly income this supports: $
Monthly saving to reach your goal: $
Age your savings run out

Total you'll contribute: $
Total investment growth: $

At the income you'd need, your savings are projected to run out around age 81, before your planned life expectancy. Consider saving more, retiring later, or planning to spend less.

Projection and breakdown

Where your nest egg comes from ($)

Your retirement balance splits into what you started with, what you added, and investment growth.

Year-by-year retirement savings schedule
Age	Start ($)	Contribution ($)	Withdrawal ($)	Growth ($)	End ($)
35	30,000	6,000	0	1,800	37,800
36	37,800	6,120	0	2,268	46,188
37	46,188	6,242.4	0	2,771.28	55,201.68
38	55,201.68	6,367.25	0	3,312.1	64,881.03
39	64,881.03	6,494.59	0	3,892.86	75,268.48
40	75,268.48	6,624.48	0	4,516.11	86,409.08
41	86,409.08	6,756.97	0	5,184.54	98,350.6
42	98,350.6	6,892.11	0	5,901.04	111,143.75
43	111,143.75	7,029.96	0	6,668.62	124,842.33
44	124,842.33	7,170.56	0	7,490.54	139,503.42
45	139,503.42	7,313.97	0	8,370.21	155,187.59
46	155,187.59	7,460.25	0	9,311.26	171,959.1
47	171,959.1	7,609.45	0	10,317.55	189,886.09
48	189,886.09	7,761.64	0	11,393.17	209,040.9
49	209,040.9	7,916.87	0	12,542.45	229,500.22
50	229,500.22	8,075.21	0	13,770.01	251,345.45
51	251,345.45	8,236.71	0	15,080.73	274,662.89
52	274,662.89	8,401.45	0	16,479.77	299,544.11
53	299,544.11	8,569.48	0	17,972.65	326,086.23
54	326,086.23	8,740.87	0	19,565.17	354,392.28
55	354,392.28	8,915.68	0	21,263.54	384,571.5
56	384,571.5	9,094	0	23,074.29	416,739.78
57	416,739.78	9,275.88	0	25,004.39	451,020.05
58	451,020.05	9,461.4	0	27,061.2	487,542.65
59	487,542.65	9,650.62	0	29,252.56	526,445.83
60	526,445.83	9,843.64	0	31,586.75	567,876.22
61	567,876.22	10,040.51	0	34,072.57	611,989.3
62	611,989.3	10,241.32	0	36,719.36	658,949.97
63	658,949.97	10,446.15	0	39,537	708,933.12
64	708,933.12	10,655.07	0	42,535.99	762,124.17
65	762,124.17	10,868.17	0	45,727.45	818,719.79
66	818,719.79	11,085.53	0	49,123.19	878,928.51
67	878,928.51	0	79,150.7	43,946.43	843,724.23
68	843,724.23	0	81,525.23	42,186.21	804,385.22
69	804,385.22	0	83,970.98	40,219.26	760,633.5
70	760,633.5	0	86,490.11	38,031.67	712,175.06
71	712,175.06	0	89,084.82	35,608.75	658,699
72	658,699	0	91,757.36	32,934.95	599,876.59
73	599,876.59	0	94,510.08	29,993.83	535,360.34
74	535,360.34	0	97,345.38	26,768.02	464,782.97
75	464,782.97	0	100,265.74	23,239.15	387,756.37
76	387,756.37	0	103,273.72	19,387.82	303,870.48
77	303,870.48	0	106,371.93	15,193.52	212,692.07
78	212,692.07	0	109,563.09	10,634.6	113,763.59
79	113,763.59	0	112,849.98	5,688.18	6,601.79
80	6,601.79	0	6,931.88	330.09	0

A retirement calculator takes some numbers that are relevant to your financial situation and turns them into a picture of what your future looks like. It will predict how much your wealth will grow over time, estimate the amount you'll actually need, and show the difference. This way, you can see what monthly income your plan covers and how much extra you have to save to make up any shortfall.

How much money do you need for retirement?

There is no one-size-fits-all answer to this question, but some general guidelines can help you reach your goal. A common goal is to have a retirement income that replaces 70-85% of your pre-retirement income on an annual basis. To do this, you will need to save enough money to generate that income for the rest of your life.

A quick estimation method is the "25 rule." Multiply your desired annual income from savings by 25. If you need $40,000 annually from your investment portfolio, this means that you would need about $1 million in savings. This calculator will project your savings and expenses per year, which will give more accurate results. However, the rule of thumb can still be helpful to check the plausibility of your planning.

How to use this calculator:

Start with the basic information. Enter your current age, planned retirement age, current savings, monthly amount you plan to save extra and annual income. With just this information and reasonable estimates, you can create a complete projection.

Open the Assumptions section and adjust the values for pre-retirement and retirement expected return rates, inflation rate, income growth rate, average life expectancy, and percentage of your income you want to save. If you expect Social Security or pension benefits, add those amounts under Other Retirement Income. The calculator will subtract these incomes from the amount that must be covered by savings.

The principle of calculating a retirement pension:

Savings grow in two ways simultaneously. The existing money grows through compound interest, and the newly deposited funds also start growing with compound interest from the date of deposit. The existing account balance increases according to the formula for compound interest.

FV = PV\,(1 + r)^{n}

In this formula, PV is the current savings, r is the annual return in decimal form and n is the number of years until retirement. The regular contributions make up a growing retirement amount as they gradually increase over time due to increasing income.

FV_{\text{contributions}} = C\,\frac{(1 + r)^{n} - (1 + g)^{n}}{r - g}

Assuming you are 35 years old, have already saved $30,000 and invest $500 per month with an annual return of 6% and the investment grows by 2% each year, your savings will grow to about $879,000 by age 67. Of that amount, about $265,000 is what you contributed while the rest was generated through returns.

The principle of calculating the amount required for retirement.

The total amount of savings required is calculated backwards. First, the income that will be needed in the first year of retirement is determined and then this income plus inflation-adjusted income for subsequent years up to the expected date of death are added together. The present value of this sum is used as a target return during retirement.

\text{Need} = A\,\frac{1 - \left(\frac{1 + i}{1 + q}\right)^{m}}{q - i}

A represents the income that must be covered by savings in year 1, i is the inflation rate, q is the return during retirement years and m is the number of years retired. If there are Social Security or pension benefits, A will be smaller because only the portion of income not covered by those sources needs to be covered.

Important rules of thumb:

The table below summarizes important policies that are commonly found in retirement plans.

Rule	What it says
Save 15 percent	Aim to put away about 15 percent of gross income, including any employer match.
The 4 percent rule	Withdrawing 4 percent of your savings in the first year, adjusted for inflation after, tends to last about 30 years.
The 25 times rule	Save roughly 25 times the annual income you want from your portfolio.
80 percent replacement	Plan to replace 70 to 85 percent of your pre-retirement income each year.
Social Security share	Benefits replace about 40 percent of a typical worker's income, so savings cover the rest.

Where does retirement income come from?

Most retirees receive income from more than one source. Employer-sponsored plans such as 401(k)s, 403(b)s and 457s, along with traditional and Roth IRAs are important savings vehicles. Many employers also match their employees' contributions. Social Security provides an inflation-adjusted base income, and a small number of retirees receive pensions as well.

Maximizing employer match is almost like getting free money and usually offers the highest return of any option available. After that, consistent contributions and time in the market are key.

Why inflation is so important:

With a 3% annual inflation rate, prices double about every 24 years. So income that feels sufficient today could leave you with far less to live on in a few decades' time. That's why this calculator adjusts your target income for inflation and shows how long savings will last assuming costs rise, rather than assuming spending stays the same.

This calculator is for general educational and planning purposes only and does not constitute financial advice. Investment returns are not guaranteed, and actual results will depend on market conditions, taxes, fees, and life expectancy. Consult a qualified financial professional before making retirement-related decisions.

Frequently asked questions

How much should you save for retirement?: Save enough to equal an amount that is between 70 and 85% of your income over the course of your life. A quick estimate would be to multiply your desired annual retirement income by 25, but this calculator will give you a more accurate result as it projects savings and expenses annually.
What is the 4% rule?: This is a guideline that says about 4% of your savings can be withdrawn in the first year of retirement and then the withdrawal factor adjusts to inflation. Historical data shows this method generally allows for savings to last approximately 30 years. This also forms the basis for the "25-times" rule, as 1 divided by 4% equals 25.
How much of your income should you save?: A common goal is to save about 15% of gross income including employer contributions. It's possible to meet this goal with less savings if you start earlier or retire later since both the length of time and amount invested in financial markets are important.
Is it possible to live on social security benefits in retirement?: This is usually not possible. Social security benefits cover about 40% of a typical worker's income, so the rest has to come from personal savings and pensions. By entering your expected benefits, a tool will calculate how much extra you need to save in order to make up for the shortfall.
How does inflation affect your retirement savings?: Because inflation increases the cost of living over time, you will need a larger amount of savings in the future to maintain your current standard of living. This calculator takes into account inflation when determining your target income and then estimates how much of your savings you'll have to draw down over time based on realistic returns. So the amount you'll need is likely higher than what your current expenses would suggest.

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Disclaimer: This calculator is provided for general informational and educational purposes only. Our calculators are under active development, and results may be inaccurate, incomplete, or unsuitable for your situation. Always verify the figures independently and seek advice from a qualified professional before relying on them. We make no warranties and accept no liability for any loss or decision arising from use of this tool.

References

Investor.gov: Compound Interest Calculator and Saving Basics
U.S. SEC explainer on compounding and long-term saving.
Social Security Administration: Retirement Benefits
Official guidance on how Social Security retirement benefits are calculated.
Investopedia: How Much Do I Need to Retire?
Replacement ratios, the 4 percent rule, and savings benchmarks by age.