standarddeviationcalculator.net

Updated Free · runs in your browser

Finance

Retirement calculator

Enter your age, savings, monthly contribution and the income you want in retirement. The calculator projects the pot at your retirement age, checks whether it can pay that income, rising with inflation, until the age you plan for, and shows how much more you would need to save if not.

State pension, Social Security, annuity. Leave 0 if none.

At this rate the savings run out after about 18.8 years of retirement, before age 90. Closing the gap takes about $335 more a month, a later retirement date or a lower income target.

Savings at age 65 $2,245,243
In today’s money$797,922
Needed at retirement$2,819,396
Shortfall$574,154
Extra saving needed per month$335
Savings last18.8 years (to about age 84)
First-year withdrawal (future money)$140,693
4% rule first-year income (today’s money)$31,917
Real return after retirement1.94%
304050607080900500000100000015000002000000 Retire at 65 age $

━ Savings balance

AgePhasePaid in / taken outBalance at year end
31Saving$12,000$65,880
32Saving$12,000$82,872
33Saving$12,000$101,054
34Saving$12,000$120,508
35Saving$12,000$141,323
36Saving$12,000$163,596
37Saving$12,000$187,428
38Saving$12,000$212,929
39Saving$12,000$240,214
40Saving$12,000$269,409
41Saving$12,000$300,648
42Saving$12,000$334,074
43Saving$12,000$369,839
44Saving$12,000$408,108
45Saving$12,000$449,056
46Saving$12,000$492,871
47Saving$12,000$539,752
48Saving$12,000$589,915
49Saving$12,000$643,589
50Saving$12,000$701,021
51Saving$12,000$762,472
52Saving$12,000$828,226
53Saving$12,000$898,582
54Saving$12,000$973,863
55Saving$12,000$1,054,414
56Saving$12,000$1,140,603
57Saving$12,000$1,232,825
58Saving$12,000$1,331,503
59Saving$12,000$1,437,089
60Saving$12,000$1,550,065
61Saving$12,000$1,670,950
62Saving$12,000$1,800,297
63Saving$12,000$1,938,698
64Saving$12,000$2,086,787
65Saving$12,000$2,245,243
66Drawing−$140,693$2,209,777
67Drawing−$144,914$2,168,106
68Drawing−$149,261$2,119,787
69Drawing−$153,739$2,064,350
70Drawing−$158,351$2,001,299
71Drawing−$163,102$1,930,107
72Drawing−$167,995$1,850,218
73Drawing−$173,035$1,761,042
74Drawing−$178,226$1,661,957
75Drawing−$183,573$1,552,304
76Drawing−$189,080$1,431,385
77Drawing−$194,752$1,298,464
78Drawing−$200,595$1,152,763
79Drawing−$206,613$993,458
80Drawing−$212,811$819,680
81Drawing−$219,195$630,508
82Drawing−$225,771$424,974
83Drawing−$232,544$202,051
84Drawing−$202,051$0
Show the working, step by step

  1. Grow today’s $50,000 and $1,000 a month for 35 years at 7.00% a year (0.5654% a month).

    savings at 65 = $2,245,243

  2. Convert to today’s money by removing 35 years of 3.00% inflation.

    $2,245,243 ÷ 1.0300^35 = $797,922

  3. The income you need from savings is $50,000 − $0 = $50,000 a year in today’s money. In 35 years’ time that is

    $50,000 × 1.0300^35 = $140,693 in the first year

  4. To draw that at the start of each of 25 years, rising with inflation, while the rest earns 5.00%, you need the present value of a growing annuity:

    required = Σ $140,693 × (1.0300 ÷ 1.0500)^k, for k = 0 … 24 = $2,819,396

  5. Compare with the projection, and spread the gap over the remaining months.

    shortfall = $2,819,396 − $2,245,243 = $574,154 extra per month = shortfall ÷ ((1 + i)^420 − 1) ÷ i = $335.48

  6. 4% rule check: take 4% of the pot in the first year.

    0.04 × $2,245,243 = $89,810 ($31,917 in today’s money)

These results are estimates from the figures you entered. Real returns vary from year to year, and fees and taxes are not included. This is a calculation, not financial advice.

How the calculation works

There are two phases.

Saving. Current savings and a monthly contribution grow at the pre-retirement return:

pot = S(1 + r₁)^Y + C × ((1 + i)^(12Y) − 1) ÷ i, i = (1 + r₁)^(1/12) − 1

Drawing. The income you want, minus any pension, is inflated to the retirement date and taken at the start of each retirement year, rising with inflation g, while the rest earns the post-retirement return r₂. The pot needed is the present value of that growing income over R years:

needed = W × Σ ((1 + g) ÷ (1 + r₂))^k, k = 0 … R − 1

The shortfall is needed − pot, spread over the months left with the same annuity formula.

A worked example

The defaults: age 30, retiring at 65, planning to 90; $50,000 saved and $1,000 a month added; 7% before retirement, 5% after, 3% inflation; $50,000 a year wanted in today’s money.

  1. After 35 years the pot is $2,245,243, or $797,922 in today’s money.
  2. $50,000 today is $50,000 × 1.03^35 = $140,693 in the first year of retirement.
  3. Funding that for 25 years, rising 3% a year, with the rest earning 5%, needs $2,819,396.
  4. Shortfall: $2,819,396 − $2,245,243 = $574,154. Saving an extra $335 a month for the 35 years closes it.
  5. Without the extra saving the pot runs out after about 18.8 years, at about age 84.

Retiring at 67 instead gives two more years of saving and two fewer of drawing: the pot grows to $2,596,206, but the gap is still about $204,905. Small changes to the inflation rate or the income target move the answer by as much as that, so try a few versions.

The 4% rule, and its caveats

The 4% rule says a first-year withdrawal of 4% of the pot, then increased with inflation, has historically lasted about 30 years. By that rule, the $2,245,243 pot supports $89,810 in the first year, which is $31,917 in today’s money, well short of the $50,000 wanted. To draw $50,000 in today’s money by the rule you would need 25 × $50,000 = $1.25 million in today’s money.

  • It comes from historical US share and bond returns. Other countries, and future returns, may be lower.
  • It targets 30 years. Retiring early, or living to 100, needs a lower rate.
  • It ignores fees and taxes, which reduce what you can safely take.
  • A bad run of returns in the first years of retirement does more damage than the same run later (sequence risk). A flexible plan that trims spending after poor years copes better.

This calculator uses a fixed return, so it cannot show sequence risk. Treat its answer as an estimate to plan around, not advice. A regulated financial adviser can look at your whole situation.

Common questions

How much do I need to retire?

Enough that the savings, drawn down year by year and still invested, cover the income you want until the age you plan for. This calculator finds that figure as the present value of an inflation-linked income: in the default example, $50,000 a year in today’s money from 65 to 90, with 3% inflation and a 5% return in retirement, needs $2,819,396 at 65, which is about $1.0 million in today’s money.

What is the 4% rule?

A rule of thumb from US research in the 1990s (Bengen, and the “Trinity study”): withdraw 4% of the pot in the first year of retirement, then raise that cash amount with inflation each year, and a mix of US shares and bonds historically lasted at least 30 years in most periods tested. Put the other way, you need about 25 times the first year’s spending. It is a starting point, not a guarantee; see the caveats on this page.

Why is the answer in today’s money different from the projected balance?

Because prices rise while you save. $2,245,243 in 35 years, at 3% inflation, buys about what $797,922 buys today (divide by 1.03^35 = 2.8139). Judge whether the pot is enough in today’s money, since that is how you know what things cost.

What return and inflation should I use?

Use figures you would be comfortable relying on; this page does not recommend any. Returns after retirement are usually set lower than before, because most people hold more bonds and cash as they age. Inflation over long periods has often been 2–3% a year in the US and UK and higher in India. Try a pessimistic case as well as your central one.

Should I include a state pension or Social Security?

Yes, if you expect one. Enter it in today’s money in “Pension or other income”. It is subtracted from the income you want, so savings only need to fund the gap. In the default example, $15,000 a year of pension brings the shortfall to zero and the savings last about 29.6 years.

Written and reviewed by our editorial team. Last updated . Method and sources: how these numbers are computed.