Retirement Calculator

What is a retirement calculator?

A retirement calculator, sometimes called a retirement savings calculator or retirement planner, estimates how your savings could grow and how much you may need to fund retirement. It compares projected savings with the amount needed to cover spending that Social Security does not cover.

This calculator uses your current savings, monthly contributions, expected investment returns, inflation, retirement age, plan age, spending and estimated Social Security. It grows savings monthly until retirement, then estimates the present value at retirement of the spending gap as that gap rises with inflation until your plan age.

Why a retirement savings estimate matters

A projection can help you decide whether to raise your 401(k) contribution, add to an IRA, adjust your retirement date or plan for lower spending. It can also show how much your result depends on assumptions about investment returns, inflation and Social Security.

The estimate is a planning tool, not a promise. Actual returns, inflation, spending and benefit amounts can differ from your inputs. Use the result to identify questions and compare scenarios, not as a guarantee that your savings will last.

How to use this retirement calculator

1. Enter your current age, the age you hope to retire and the age through which you want the plan to provide for you.
2. Enter your current retirement savings and your total monthly contributions, including any employer contribution. Include the yearly increase you expect in contributions.
3. Choose separate expected annual returns for the years before and during retirement. These are assumptions, not guaranteed results.
4. Enter your inflation assumption and yearly retirement spending in today's dollars. Include the spending you expect your savings and benefits to cover.
5. Enter your expected monthly Social Security benefit in today's dollars. Check your estimate with the Social Security Administration, and update it if your expected benefit changes.
6. Review the projected savings, amount needed and surplus or shortfall. Change one assumption at a time to see which decisions move the estimate most.

Retirement calculator example

How to read your retirement calculator results

Projected savings at retirement is the calculator's estimate of the balance you may have when you stop working. Amount needed at retirement is its estimate of the savings required to cover the projected spending gap through your plan age, accounting for inflation and Social Security.

A surplus means projected savings exceed the estimated amount needed under your assumptions. A shortfall means the estimate is below that amount. Neither result predicts exactly what will happen. Pay attention to the yearly spending, Social Security and return assumptions behind the comparison, not just the headline number. The sustainable yearly withdrawal is an estimate within this projection, not a guaranteed income amount.

How to improve your retirement outlook

1. 01

   Raise contributions when your budget allows

   Consider increasing your monthly 401(k) or IRA contribution, or directing part of a raise toward retirement savings. If your employer offers a contribution, include it in the calculator so your estimate reflects the full amount going into the account.

2. 02

   Increase contributions over time

   Set a planned yearly contribution increase that fits your expected income and expenses. Test a higher increase in the calculator and compare the projected balance with your current plan.

3. 03

   Review your retirement spending

   Separate needs from optional expenses, and update the yearly spending estimate when your plans change. A realistic spending figure helps you judge whether the projected savings can support the life you intend to have.

4. 04

   Compare retirement dates and assumptions

   Test a later retirement age or different return and inflation assumptions. Use cautious assumptions you can explain, rather than relying on one favorable projection. For broader planning about retirement accounts, investments or benefits, confirm your choices with a qualified financial professional.

Common retirement calculator mistakes

• Entering spending without considering inflation

  The spending input is in today's dollars, while the calculator estimates the first retirement year's spending after inflation. Keep those amounts distinct when reviewing the result.

• Leaving out an employer contribution

  If you enter only your own contribution, projected savings may not reflect the full amount being saved. Add the employer contribution to the monthly total when applicable.

• Treating a return assumption as certain

  Returns can vary, and the calculator uses the rates you enter. Compare more than one reasonable scenario instead of treating the projection as a forecast.

• Using an outdated Social Security estimate

  Your expected benefit affects the amount your savings must cover. Check the estimate and revise the input when your benefit information or retirement plans change.

The retirement formula

Key terms

Present value

The value at retirement of future spending needs, calculated using the return assumption during retirement.

Inflation

A rise in prices over time. In this calculator, inflation increases the spending gap used in the retirement projection.

Social Security

A benefit estimate entered as monthly income in today's dollars and used to reduce the amount retirement savings need to cover.

Sustainable yearly withdrawal

The calculator's estimate of yearly withdrawals supported by the retirement savings projection and its assumptions. It is not a guaranteed payment.