Retirement Calculator

A widely used benchmark is the 4% rule, which suggests you need 25 times your expected annual retirement expenses saved before you stop working. If you anticipate needing $50,000 per year in retirement, your target would be $1.25 million. This rule assumes a diversified portfolio and a 30-year retirement horizon, and it has historically sustained withdrawals through most market conditions.

The 4% rule originated from the Trinity Study conducted in 1998, which analyzed historical market data from 1926 to 1995. While it has held up well historically, some financial planners argue that lower expected future returns and longer life expectancies may require a more conservative withdrawal rate of 3% to 3.5%. The right number for you depends on your risk tolerance, retirement duration, and whether you have other income sources like Social Security or a pension. This calculator lets you model different scenarios so you can find the savings target that matches your specific retirement vision.

Compound interest is the engine behind long-term wealth building, earning returns not just on your original contributions but on all previously accumulated gains. A single $10,000 investment earning 7% annually grows to roughly $76,000 over 30 years without any additional contributions. This exponential growth effect is why starting to save even small amounts early in your career can produce dramatically larger results than waiting.

To put this in concrete terms: if you invest $500 per month starting at age 25 with a 7% average annual return, you will have approximately $1.2 million by age 65. If you wait until age 35 to start investing the same $500 per month, you will have only about $567,000 — less than half. The person who started at 25 contributed $60,000 more in total, but their portfolio is $633,000 larger because those extra 10 years of compounding nearly doubled the outcome. Every year you delay costs exponentially more than the previous year, which is why the best time to start saving is always now.

Fidelity suggests saving 1x your annual salary by age 30, 3x by 40, 6x by 50, and 10x by 67. These benchmarks assume you begin saving at age 25 and plan to maintain your current lifestyle in retirement. While individual circumstances vary, these milestones provide a useful framework for tracking whether your retirement savings are on pace.

If you are behind on these benchmarks, closing the gap requires either increasing your savings rate, earning a higher return, or planning to work longer. Increasing your 401(k) contribution by just 1% of salary each year is a painless catch-up strategy that compounds meaningfully over time. If you are over 50, take advantage of catch-up contribution limits that allow an extra $7,500 per year in 401(k) accounts and an extra $1,000 in IRAs. The key insight is that being behind does not mean the situation is hopeless — it means every additional dollar saved today works harder than it would have earlier, because the urgency amplifies your focus.

Social Security provides a foundation of retirement income, with average monthly benefits around $1,900 as of 2024. However, Social Security is designed to replace only about 40% of pre-retirement income for average earners. The age at which you claim benefits significantly affects your monthly payment: claiming at 62 permanently reduces benefits by up to 30%, while delaying to age 70 increases them by approximately 24% compared to full retirement age.

The decision of when to claim Social Security is one of the most consequential financial choices in retirement. For a worker entitled to $2,200 per month at full retirement age (67), claiming at 62 reduces the benefit to $1,540 per month, while waiting until 70 increases it to $2,728. Over a 20-year retirement, the difference between claiming at 62 versus 70 totals over $285,000 in cumulative benefits — assuming you live to age 82 or beyond. Workers in good health with other income sources to bridge the gap generally benefit from delaying, while those with health concerns or immediate financial needs may be better served by claiming earlier.