Retirement Calculator
Estimate your retirement nest egg and the sustainable annual income it can provide with the 4% rule.
Retirement Calculator — input your values
What does this financial calculator do?
This retirement calculator projects how large your nest egg will be by the time you retire, based on your current savings, monthly contributions and expected investment return. It compounds monthly, the way retirement accounts actually grow.
It then converts the nest egg into a sustainable retirement income using a withdrawal rate you choose — the 4% rule by default. You see both the annual and monthly income your savings can support, plus a chart of how the balance builds over the years.
Formula and variables
The nest egg is the future value of current savings plus monthly contributions compounded at the expected return.
| Symbol | Meaning |
|---|---|
| Nest egg | Balance at retirement, grown by returns and contributions |
| Withdrawal rate | Portion withdrawn each year in retirement (e.g. 4%) |
| Income | Sustainable annual retirement income |
Worked example
A 30-year-old with $50,000 saved contributes $500 per month, earns 7% per year, and plans to retire at 65 with a 4% withdrawal rate.
- Years to retirement: 65 − 30 = 35 years.
- Total contributed: $50,000 + ($500 × 420) = $260,000.
- Compounded at 7% monthly, the nest egg reaches ≈ $1,135,000.
- Annual income: 4% × $1,135,000 ≈ $45,400.
- Monthly income: ≈ $3,780.
Answer: A nest egg of about $1,135,000 supporting roughly $45,400 per year.
Tips and common mistakes
Tips
- Take full advantage of employer 401(k) matches — that is free money and the easiest return you will ever get.
- Start with any amount, even small; decades of compounding turn modest contributions into large nest eggs.
- Lower the withdrawal rate to 3.5% for extra safety if you expect a long retirement.
- Recheck the plan every few years: salary increases are the perfect excuse to raise contributions.
Common mistakes to avoid
- Using an unrealistically high return for planning, which inflates the projected nest egg.
- Ignoring that social security and pensions add income on top of what your savings provide.
- Withdrawing more than 4% to 5% in early retirement, which sharply increases the chance of running out of money.
Retirement Calculator — frequently asked questions
What is the 4% rule?
A planning guideline stating that withdrawing 4% of your nest egg in the first year of retirement, then adjusting for inflation, is likely to sustain a 30-year retirement for a diversified portfolio.
How much do I need to retire?
Divide your desired annual retirement income by your withdrawal rate. To support $50,000 per year at 4%, you need $50,000 ÷ 0.04 = $1,250,000.
Should I count social security in my plan?
Yes — social security typically replaces a meaningful share of pre-retirement income. Estimate your benefit and subtract it from the income your nest egg must provide.
What return should I assume?
A 6% to 7% average is commonly used for stock-heavy portfolios before inflation. Using a rate in this range gives a reasonable long-run estimate.
When should I start saving for retirement?
Today. Money invested in your twenties grows for the longest period and does the most work; each year of delay makes the required monthly contribution larger.
Does the calculator account for inflation in retirement?
Not directly. Using a rate net of inflation (about 5%) keeps the projected income roughly in today's purchasing power — a useful way to plan.