Retirement Calculator

1. Enter your current age and desired retirement age.
2. Input your current retirement savings balance.
3. Set your planned monthly contribution amount.
4. Enter the expected annual rate of return on investments.
5. View your projected savings, total contributions, and investment growth.
6. Check the estimated monthly retirement income based on the 4% rule.
7. Expand the year-by-year breakdown to see growth at each age.

What Is Retirement Planning?

Retirement planning is the process of determining how much money you need to save and invest during your working years to maintain your desired lifestyle once you stop earning income. It involves setting a target retirement age, estimating future expenses, and developing a savings strategy to reach your financial goal. This calculator helps you project your retirement savings by combining your current balance, regular monthly contributions, and expected investment returns over your remaining working years. The earlier you start planning, the less you need to save each month because compound growth has more time to multiply your wealth.

How Retirement Projections Are Calculated

This calculator projects your retirement savings by applying compound growth annually. Each year, your existing balance grows by the expected annual return rate, and your monthly contributions (totaled for the year) are added. The growth calculation uses a mid-year contribution assumption, meaning contributions made throughout the year earn approximately half a year of returns on average. This provides a more realistic estimate than assuming all contributions are made at the beginning or end of the year. The estimated monthly retirement income is based on the 4% rule: Monthly Income = (Total Savings x 0.04) / 12.

Common Use Cases

• Determining if your current savings rate puts you on track for a comfortable retirement
• Estimating how much monthly income your retirement portfolio can sustain
• Comparing the impact of retiring at different ages (55, 60, 65, or 70)
• Calculating how increasing your monthly contributions by $100 or $200 affects your outcome
• Evaluating how different rates of return (conservative vs. aggressive) change your projections
• Setting a target savings number based on your desired retirement lifestyle

401(k) vs. IRA: Choosing the Right Retirement Account

The two most common retirement savings vehicles in the United States are 401(k) plans and Individual Retirement Accounts (IRAs). A 401(k) is an employer-sponsored plan that allows you to contribute pre-tax dollars (up to $23,000 per year in 2024, or $30,500 if you are 50 or older). Many employers offer matching contributions, which is essentially free money. For example, an employer matching 50% of contributions up to 6% of your salary adds thousands of dollars to your retirement savings each year. If your employer offers a match, contributing at least enough to capture the full match should be a top priority.

IRAs offer more investment flexibility and come in two main types. A Traditional IRA provides a tax deduction on contributions now, with taxes paid on withdrawals in retirement. A Roth IRA is funded with after-tax dollars, but qualified withdrawals in retirement are completely tax-free. The annual IRA contribution limit is $7,000 (or $8,000 if 50 or older) for 2024. Choosing between a Traditional and Roth IRA generally depends on whether you expect your tax rate to be higher or lower in retirement. If you are in a lower tax bracket now (early career), a Roth IRA often makes sense because you pay taxes at today's lower rate. If you are in a higher bracket now, a Traditional IRA or 401(k) provides immediate tax savings.

See how compound growth works in detail with the Compound Interest Calculator, track shorter-term savings goals with the Savings Calculator, or measure your investment returns with the ROI Calculator.