Retirement Calculator: Am I On Track?

How to use this calculator

This is a "how much do I need to retire" calculator. It works out the balance you'd need to fund your retirement income to a chosen age, then compares that with where your savings are headed.

• Age, retirement age, plan-until age: your plan-until age is how long the money should last. Many people use 90 or 95 to be safe.
• Current savings: add up your 401(k)s, IRAs and other accounts set aside for retirement.
• Monthly savings: what goes in each month, including any employer match. Add a yearly increase if your saving grows with raises.
• Returns before and after retirement: the average yearly return you assume. Many people use a lower return after retiring, when portfolios are often more conservative.
• Inflation: 2.5% to 3% is a common assumption.
• Desired retirement income: in today's dollars, before tax. The calculator raises it with inflation every year.
• Social Security estimate and start age: use the monthly estimate from your my Social Security account.

You'll see your on-track percentage, the extra monthly saving needed, the age your money would run out, a 4% rule target, and a chart of your balance by age.

How we calculate what you need

Most calculators just multiply your income goal by 25. Ours runs your actual plan year by year. It solves for the exact balance at retirement that lets the money last to your plan-until age.

Each year in retirement, we work out your income need in that year's dollars, subtract Social Security once it starts, and withdraw the rest monthly. The remaining balance grows at your after-retirement return.

yearly withdrawal = income goal × (1 + inflation)^years from now − Social Security (if started)
balance next month = balance × (1 + monthly return) − monthly withdrawal
needed at retirement = the starting balance that reaches $0 exactly at your plan-until age

Worked example: You're 40 with $100,000 saved and put in $500 a month, rising 2% a year. You plan to retire at 67 and want money to last to 92. You assume 6% returns before retiring, 5% after, and 2.5% inflation. You want $60,000 a year in today's dollars and expect $2,000 a month from Social Security at 67.

• Projected balance at 67: about $962,000 (about $494,000 in today's dollars).
• Balance needed: about $1.30 million.
• On track: about 74%.
• Money runs out: around age 84.
• Extra saving to close the gap: about $350 a month, rising with your 2% yearly increase.

The 4% rule target for this plan is higher, about $1.75 million. That's because the rule assumes your full withdrawal is needed from day one and is built for worst-case markets. Our year-by-year method uses your own return assumptions instead.

Retirement savings by age

A common benchmark is a widely used Fidelity guideline. It's a rule of thumb for someone who wants to keep a similar lifestyle in retirement:

On a $70,000 salary, that's about $210,000 by 40 and $700,000 by 67. These benchmarks are a quick check, not a plan. If you expect a pension, plan to downsize, or retire later, your number may be lower. If you retire early or expect high health costs, it may be higher.

The 4% rule and its limits

The 4% rule calculator logic is simple. Withdraw 4% of your savings in year one, then raise the dollar amount with inflation. Your target is 25 times your first-year withdrawal. If you need $40,000 a year from savings, the target is $1 million.

The rule comes from studies of historical US stock and bond returns over 30-year retirements. It has limits:

• It assumes about 30 years. A FIRE number for someone retiring at 45 may need to support 45 years or more. Many early retirees plan around 3% to 3.5%.
• It ignores fees and taxes. Withdrawals from a traditional 401(k) or IRA are taxed as income.
• It's rigid. Real retirees often spend less in bad years, which helps money last longer.

Sequence-of-returns risk

When losses happen matters as much as how big they are. A market drop in the first few years of retirement hurts more than the same drop later. You're selling investments while prices are low, so less is left to recover.

Two retirees with the same average return can end up very differently. Ways people often manage this risk:

• Keep one to three years of spending in cash or short-term bonds.
• Cut withdrawals a little after a bad year.
• Delay retirement or Social Security by a year or two if markets fall right before you retire.

Our calculator uses a steady average return, so treat its results as a baseline. Test a lower return to see how sensitive your plan is.

Social Security claiming age

You can start Social Security as early as 62 or as late as 70. Claiming at 62 permanently cuts your monthly benefit compared with your full retirement age. For people born in 1960 or later, full retirement age is 67. Each year you wait past that, up to 70, raises your benefit.

Try different start ages in the calculator. Waiting often means drawing more from savings early on, but less later. Your personal estimates at each age are on ssa.gov.

Your FIRE number

Your FIRE number is the savings that could cover your spending without a paycheck. The simple version is 25 times your yearly spending. Spend $50,000 a year and your FIRE number is $1.25 million.

Retiring early changes the math in a few ways. Your money may need to last 40 or 50 years, so many early retirees use 28× to 33× instead. You'll also wait longer for Social Security and Medicare, which starts at 65. Health insurance before then can be a large cost.

To model early retirement, set your retirement age low, your plan-until age to 95, and Social Security to start at 62 or later.

Am I on track for retirement?

If you're under 100%, small changes add up over time. To reach $1 million by 60, starting at 30 with nothing saved, you'd need about $855 a month at a 7% average return. Starting at 40, it's roughly $1,970 a month.

The biggest levers are:

• Saving more, especially by capturing your full employer match. See the 401(k) calculator.
• Working a few more years, which adds savings and shortens retirement.
• Lowering your retirement income goal.

To see how steady deposits grow, try the compound interest calculator.