Retirement Calculator

The 4% Rule and 25x Target

The most widely cited retirement planning guideline is the 4% rule, derived from the Trinity Study (1998). It suggests you can withdraw 4% of your portfolio in year one of retirement and adjust annually for inflation — with a historically high probability of not running out of money over 30 years.

The practical implication: you need roughly 25 times your desired annual retirement spending. If you want $60,000 per year, you need $1.5 million. If you want $80,000, you need $2 million.

Some planners now recommend a 3.5% withdrawal rate for longer retirements (35+ years) or in low-interest-rate environments. The 4% rule is a starting point, not a guarantee.

The Power of Starting Early

Compound interest is the most powerful force in long-term savings — but it requires time. A 25-year-old who saves $300/month at 7% annual return will have $910,000 by age 65. A 35-year-old starting the same plan will have only $453,000 — less than half, despite saving for only 10 fewer years.

The first decade of saving does the heaviest lifting. Money saved in your 20s has 40+ years to compound; money saved in your 50s has far less time. This is why financial advisors consistently emphasize starting as early as possible, even with small amounts.

A common exercise: calculate what $1,000 saved at age 25 is worth at 65 at 7% return. The answer is $14,974. At age 35, the same $1,000 becomes $7,612. At 45, it is $3,870. Time is your most valuable asset.

Account Types: 401(k), IRA, and Roth

Where you save matters almost as much as how much you save. Tax-advantaged accounts — 401(k)s, IRAs, and Roth versions — dramatically boost effective returns by deferring or eliminating taxes on growth.

• •Traditional 401(k)/IRA: Contributions are pre-tax, reducing your taxable income today. You pay taxes on withdrawals in retirement.
• •Roth IRA/401(k): Contributions are post-tax, but all growth and withdrawals are tax-free. Ideal if you expect to be in a higher tax bracket in retirement.
• •Employer match: Always contribute enough to capture the full employer match — it is an immediate 50–100% return on your money.

2024 contribution limits: $23,000 for 401(k)s ($30,500 if 50+), $7,000 for IRAs ($8,000 if 50+). Maxing these accounts should be a priority before taxable investing.

Inflation: The Silent Retirement Risk

A $60,000 income in today's dollars will feel like much less 30 years from now. At 3% annual inflation, you'll need $145,000 in 30 years to match today's $60,000 purchasing power. Retirement planning that ignores inflation is dangerously optimistic.

The calculator above uses a "real return" approach — netting inflation out of your investment return — to give projections in today's dollars. A 7% nominal return with 3% inflation yields roughly 4% real return.

Social Security is indexed to inflation (via COLA adjustments), which makes it a valuable base income layer. Healthcare costs, however, inflate faster than general CPI — budget for rising medical expenses as a key retirement risk.

Social Security: When to Claim

Social Security is one of the most valuable financial assets most Americans have — and the claiming decision can easily be worth $100,000 or more over a lifetime.

You can claim as early as 62, but your benefit is permanently reduced by up to 30%. Waiting until 70 increases your benefit by 8% per year beyond your full retirement age (FRA), typically 66–67. If you live past 80, delaying to 70 almost always pays off.

This calculator does not include Social Security — use the SSA's estimator at ssa.gov for your personalized projection. A common strategy: plan your private savings to cover a desired income level, then treat Social Security as additional security margin.

Benchmarks by Age

Fidelity publishes widely-used retirement savings benchmarks as multiples of salary:

These are rough benchmarks, not requirements. Your actual target depends on your expected expenses, Social Security income, pension benefits, healthcare costs, and desired lifestyle. Use the calculator above to build a personalized projection.