Retirement savings calculator

Project what your savings grow to by retirement and compare it with what the 4% rule says you'll need. The default scenario — age 35, $60,000 saved, $500 a month at 6% — reaches $947,381 against a $1,983,381 target, and closing that gap takes about $1,425 a month. The formula, every assumption and a worked example are below the worksheet.

Worksheet

Current age yrs

Retirement age yrs

Current savings $

Monthly contribution $

Expected annual return %

Annual spending in retirement $ today's $

Expected inflation %

Social Security $ / mo, today's $

Projected at age 67 $947,381

What you'll need (4% rule): $1,983,381
Surplus or gap: -$1,036,000
On track?: No
Monthly contribution to close the gap: $1,425
Years of compounding left: 32

How the formula works

The question has two halves: what your savings grow to, and what retirement will cost. The projection is the compound interest formula — today's savings $P$ and the stream of monthly contributions $C$, compounded monthly at the effective monthly rate $i$ over the $n$ years until retirement, deposits landing at the end of each month:

\[ \mathrm{FV} \;=\; \underbrace{P\,(1+i)^{12n}}_{\text{today's savings}} \;+\; \underbrace{C\cdot\frac{(1+i)^{12n}-1}{i}}_{\text{monthly contributions}}, \qquad i = (1+r)^{1/12}-1 \]

The cost side is stated in today's dollars, so it must first be moved to retirement-year dollars. Spending $s$ — and the Social Security benefit — grows with inflation $g$ for $n$ years:

\[ s_{\mathrm{ret}} \;=\; s\,(1+g)^{n} \]

Social Security covers part of that inflated spending. The rest must come from the portfolio, and the 4% rule sizes the portfolio that can supply it: withdraw 4% of the nest egg in year one and adjust for inflation thereafter. Four percent per year means the nest egg is 25 times the annual draw — the two statements are the same fact, since $1/0.04 = 25$:

\[ \text{Needed} \;=\; 25 \times \max\bigl(s_{\mathrm{ret}} - ss_{\mathrm{ret}},\; 0\bigr) \]

The verdict is projected minus needed. When it is negative, the worksheet also inverts the annuity term to find the monthly contribution $C^{*}$ that would close the gap from here:

\[ C^{*} \;=\; \frac{\bigl(\text{Needed} - P\,(1+i)^{12n}\bigr)\, i}{(1+i)^{12n}-1} \]

The 4% rule is a heuristic, not a law — it came from back-testing US stock-and-bond portfolios over historical 30-year retirements, and its limits are listed under the assumptions below. It is used here because it turns a vague question into a number you can check.

What each input means

Current age and retirement age: Their difference $n$ is the years of compounding left, and it is the input that matters most. Every year you wait removes a year of growth from every dollar you ever contribute — the questions below put a number on it.
Current savings — $P$: Everything already earmarked for retirement: 401(k), IRA, and taxable accounts you intend to spend in retirement. Not your emergency fund, and not your home — see the questions below on home equity.
Monthly contribution — $C$: What you add every month across all accounts, assumed constant and deposited at the end of the month. Include any employer match — it compounds the same as your own money.
Expected annual return — $r$: The nominal yearly growth assumption, before inflation. A diversified stock-heavy portfolio has returned somewhere near 7–10% nominal over long US history; 5–7% is a more cautious planning figure. Nothing guarantees any of these.
Annual spending in retirement — $s$: What a year of your retirement would cost in today's dollars. A common starting point is 70–80% of current spending; the calculator inflates it to retirement-year dollars for you.
Expected inflation — $g$: How fast prices rise between now and retirement. The Federal Reserve targets 2%; the long US average is nearer 3%. It inflates both your spending and the Social Security benefit, since benefits carry cost-of-living adjustments.
Social Security — monthly, today's dollars: Your estimated benefit from ssa.gov, in today's dollars. The average retired-worker benefit is near $2,000 a month. Enter 0 to plan without it — the nest egg required jumps sharply, as the questions below show.

A worked example

The worksheet's defaults: age 35, retiring at 67, with $60,000 saved, $500 added monthly, a 6% return, $60,000 a year of retirement spending in today's dollars, 2.5% inflation and $2,000 a month of Social Security.

There are $n = 32$ years to go. The effective monthly rate is $i = 1.06^{1/12} - 1 = 0.004868$, and over $12n = 384$ months the growth factor is $(1+i)^{384} = 6.4534$.

Today's $60,000 grows by that factor on its own: $60,000 × 6.4534 = $387,203.
The $500 monthly stream accumulates to $500 × (6.4534 − 1) / 0.004868 = $560,178.
Projected at 67: $947,381.

Now the cost side. At 2.5% inflation, prices multiply by $1.025^{32} = 2.2038$ over 32 years, so $60,000 of spending becomes $132,225 a year, and the $2,000-a-month benefit ($24,000 a year) becomes $52,890. The portfolio must supply the difference, $132,225 − $52,890 = $79,335 a year — at a 4% initial withdrawal rate that takes 25 × $79,335 = $1,983,381.

The verdict: $947,381 projected against $1,983,381 needed — a gap of -$1,036,000. Closing it from age 35 takes a contribution of about $1,425 a month instead of $500. That is the number worth acting on: the gap looks enormous, but the monthly change that closes it is merely uncomfortable.

Fig. 1 — The default scenario. The curve is the projected balance from age 35 to 67; the dashed line is the $1,983,381 the 4% rule implies. The visual question is whether the curve reaches the line — here it stops $1,036,000 short.

Assumptions and limits

The return is constant. Real markets deliver volatility around the average, and the order of returns matters — a crash just before or after retirement (sequence-of-returns risk) can sink a plan whose average return was fine. A smooth 6% line models neither.
The 4% rule is an initial-withdrawal heuristic from historical US market data over 30-year retirements — not a guarantee, not tuned to longer retirements, other countries' markets, or today's valuations. Treat 25× as a benchmark, not a contract.
The Social Security figure is your own estimate. Benefits depend on your earnings record and claiming age; get the real number from ssa.gov.
Taxes are ignored. A traditional 401(k) dollar, a Roth dollar and a taxable-account dollar are worth different amounts in retirement; this model treats them the same.
Contributions are constant to retirement. Most people's rise with income — which helps — and pause in bad years — which hurts.
This is arithmetic, not advice. It shows what the inputs imply; it cannot know what markets, inflation or Congress will do.

Questions people ask

Is the 4% rule still valid?

It remains the most common benchmark, but it is a 1990s back-test of US history, not a law. Researchers have argued for lower initial rates (3–3.5%) when bond yields and stock valuations look unfavorable, and for higher ones when retirees stay flexible about spending. The honest reading: 4% — a 25× nest egg — is a reasonable planning anchor, and flexibility in retirement matters more than the second decimal of the withdrawal rate.

What return should I assume?

Lower than the brochure. US stocks have averaged roughly 10% nominal over the last century, but a diversified portfolio holds bonds too, fees subtract, and the future need not repeat the past. Planners commonly use 5–7% nominal for a mixed portfolio. The worksheet's 6% default is in that band; run it at 5% as well and plan for the number you can live with being wrong about.

How much does Social Security change the number?

A lot — it is an inflation-adjusted annuity, and replacing one is expensive. In the worked example, $2,000 a month in today's dollars grows to $52,890 a year by retirement, and every dollar of benefit is a dollar of spending the portfolio need not cover, at 25× leverage: with the benefit the nest egg required is $1,983,381; set it to zero and it jumps to $3,305,635 — a difference of $1,322,254.

What does starting 10 years later cost?

Run the same inputs from age 45 instead of 35: the monthly contribution needed to hit the same target rises from about $1,425 to about $2,493 — roughly 1.7× as much, for the same retirement. The decade you skipped was not the decade of contributions; it was the decade of compounding on everything you would ever contribute. Time in the market is the one input you cannot buy back.

Should I count my home equity as retirement savings?

Usually not in this worksheet. The 4% rule assumes a portfolio you can sell in slices; a house is not, and you still have to live somewhere. Equity becomes spendable only through a sale-and-downsize, a reverse mortgage, or borrowing — each with real costs. A cleaner approach: leave the house out of the nest egg, and let a planned downsize reduce the spending input instead.