Retirement Calculator

The most widely used rule is the 25× rule: multiply your desired annual retirement income by 25. If you want $60,000/year in retirement, you need $1,500,000 in savings. This is derived from the 4% safe withdrawal rate — research by financial planners Bengen (1994) and the Trinity Study (1998) found that withdrawing 4% of a retirement portfolio annually has historically sustained portfolios for 30+ years. For a 40-year retirement, some planners recommend a 3.5% rate, implying a 29× multiplier.

Common benchmarks (Fidelity): By 30: 1× your annual salary. By 40: 3× your annual salary. By 50: 6× your annual salary. By 60: 8× your annual salary. By 67: 10× your annual salary. These are guidelines, not guarantees — actual needs vary by lifestyle, health, Social Security benefits, and investment returns. If you're behind these benchmarks, increase your savings rate rather than chasing higher returns.

The 4% rule states that you can safely withdraw 4% of your retirement portfolio in the first year, then adjust that amount for inflation each subsequent year, with a historically low risk of running out of money over a 30-year retirement. For example: $1,000,000 portfolio × 4% = $40,000/year ($3,333/month). The rule was derived from historical US stock and bond market data. In lower-return environments or for longer retirements (40+ years), many financial advisors now recommend a 3–3.5% withdrawal rate.

A 7% annual return is a commonly used real (inflation-adjusted) return assumption for a diversified stock portfolio. Historically, the US stock market (S&P 500) has returned approximately 10% nominally and 7% after inflation per year over long periods. However, past performance doesn't guarantee future results. Conservative planners use 5–6%. Aggressive assumptions use 8–9%. For a balanced portfolio of 60% stocks / 40% bonds, 5–6% is a reasonable real return expectation over a 30-year horizon.

A 401(k) is a US employer-sponsored retirement savings account that provides two major tax advantages: contributions reduce your taxable income now (traditional 401k), or grow and are withdrawn tax-free in retirement (Roth 401k). Many employers match contributions — this is essentially free money. 2024 contribution limits: $23,000/year ($30,500 if age 50+). Over 30 years at 7% return, maxing a 401k could grow to $2.4 million. Always contribute at least enough to get your full employer match before considering other investments.