🎯 Retirement Savings Calculator
Plan for retirement and calculate your savings goals
How to Use This Calculator
- Enter your current age and target retirement age (typically 65-67)
- Input your current retirement savings across all accounts (401k, IRA, etc.)
- Enter your planned monthly contribution going forward
- Set the expected annual return rate (6-8% is typical for diversified portfolios)
- Results update automatically showing total at retirement, contributions, and investment growth
Understanding Retirement Savings
How Much Do You Need?
A common rule of thumb is the "25x rule": save 25 times your desired annual retirement income. If you want $60,000/year in retirement, aim for $1.5 million saved. Alternatively, the "4% rule" suggests you can safely withdraw 4% of your retirement savings annually. Financial advisors often recommend having 10x your annual salary saved by retirement age.
The Power of Starting Early
Starting early is the single most powerful retirement strategy. Example: At 7% annual return, contributing $500/month from age 25-65 yields $1.2 million. Starting at age 35 yields only $566,000 – less than half! Those extra 10 years of compound growth make an enormous difference. Even if you can only afford small contributions early on, start now rather than waiting to contribute more later.
Choosing Your Return Rate
Historical U.S. stock market returns average 10% annually, but it's wise to be conservative. Most financial planners use 6-8% for retirement projections. Younger investors with decades until retirement can use higher rates (7-8%) since they can ride out market volatility. Those within 10 years of retirement should use lower rates (5-6%) as they shift to more conservative bonds and cash allocations.
Maximizing Retirement Contributions
Take full advantage of employer 401(k) matching – it's free money! If your employer matches 50% up to 6% of salary and you earn $60,000, contributing $3,600/year gets you an extra $1,800 free. Also maximize tax-advantaged accounts: in 2024, you can contribute up to $23,000/year to a 401(k) and $7,000 to an IRA. Catch-up contributions for those 50+ allow even more. Every dollar contributed reduces your current tax bill while growing tax-deferred.
Frequently Asked Questions
How much should I save for retirement?
Financial advisors often recommend saving 10-15% of your gross income for retirement. A common rule of thumb is to have 10x your annual salary saved by retirement age. For example, if you earn $60,000/year, aim for $600,000 saved by age 67. Use the 25x rule for income replacement: if you want $50,000/year in retirement, aim for $1.25 million saved.
What is a realistic return rate for retirement savings?
Historical stock market returns average 7-10% annually before inflation. Conservative estimates use 6-7% for diversified portfolios. Younger investors might use 8%, while those near retirement might use 5-6% to account for more conservative allocations. Remember that past performance doesn't guarantee future results, so it's better to be conservative in your planning.
Should I prioritize 401(k) or IRA?
Prioritize 401(k) contributions up to your employer match (free money!), then max out an IRA for better investment options and lower fees, then return to maxing out your 401(k). Both offer tax advantages: traditional versions reduce current taxes, Roth versions offer tax-free withdrawals in retirement. Many people benefit from having both types for tax diversification.
What if I started late?
Don't panic – it's never too late to start. You'll need to save more aggressively, but catch-up contributions for those 50+ help ($7,500 extra in 401(k), $1,000 extra in IRA). Consider working a few extra years, reducing retirement expenses, or part-time work in early retirement. Even starting at 50 with $500/month at 7% yields $153,000 by 65 – better than nothing!
How does inflation affect retirement savings?
Inflation erodes purchasing power over time. At 3% annual inflation, $1 today will only buy about $0.55 worth of goods in 20 years. This is why investment returns matter – your savings must grow faster than inflation. If you expect 7% returns and 3% inflation, your "real" return is about 4%. Factor inflation into retirement planning by increasing your savings target or assuming lower real returns.
Is this tool free to use?
Yes! This retirement calculator is completely free with no hidden costs, subscriptions, or limitations. Use it to plan your financial future and adjust your savings strategy.
Is my data private?
Absolutely. All calculations are performed locally in your browser. Your financial information never leaves your device and is not stored on any server.