Retirement Calculator: Plan Your Financial Independence
Plan your retirement with our comprehensive calculator. Input your current savings, monthly contributions, and expected returns to see how your retirement savings will grow over time.
Retirement Calculator
How Much Do You Really Need?
A common rule of thumb is to aim for 10-12 times your annual income by retirement. So if you're making $75,000, try to save $750,000-$900,000. But this varies wildly depending on when you want to retire, your lifestyle, whether you'll have a pension, and how much Social Security you'll get.
The 4% rule says you can withdraw 4% of your portfolio each year without running out of money over a 30-year retirement. So $1 million would give you $40,000 annually. But if you retire early or want to be extra safe, use 3-3.5% instead.
The biggest factors are your current age, how much you've already saved, how much you can contribute monthly, and your expected investment returns (realistically 6-7% for a balanced portfolio). Don't forget to account for inflation—it'll eat into your purchasing power over time, especially for healthcare.
Common Retirement Planning Mistakes
Starting too late: This is the biggest one. Starting at 25 with $200/month beats starting at 35 with $400/month—the early starter ends up with $525,000 more despite putting in $24,000 less. Time matters more than amount. Start now with whatever you can, even $25-50/month.
Not taking the employer match: If your company matches 401(k) contributions and you're not maxing it out, you're leaving free money on the table. A typical 50% match on 6% of salary is literally a guaranteed 50% return. Contribute at least enough to get the full match before anything else.
Being too conservative when young: If you're in your 20s-30s with decades until retirement, being 100% in bonds or cash is a mistake. You have time to ride out market dips. A balanced portfolio with 80-90% stocks when young gives you much better long-term growth.
Cashing out when you change jobs: Withdrawing your 401(k) when you leave a job costs you 10% penalty plus taxes, and you lose decades of compound growth. Roll it into an IRA or your new employer's plan instead.
Not planning for healthcare: Medicare doesn't cover everything. A healthy 65-year-old couple needs about $300,000 saved just for healthcare in retirement. Factor in 5-7% annual increases in healthcare costs.
Underestimating how long you'll live: Planning to live to 85 when you might live to 95 means running out of money. Plan for living into your 90s, especially if you're healthy and have family longevity.
Frequently Asked Questions
How much money do I need to retire comfortably?
A common target is 10-12 times your annual income. So if you make $75,000, aim for $750,000-$900,000. But this really depends on your lifestyle, healthcare needs, and other income like Social Security or a pension. Using the 4% rule, you'd withdraw 4% each year ($40,000 from $1 million), which historically lasts 30+ years.
What is the 4% rule for retirement withdrawals?
It means you can withdraw 4% of your portfolio each year without running out over a 30-year retirement. $1 million = $40,000/year. This assumes a balanced mix (60% stocks, 40% bonds) and adjusts for inflation. If you retire early or want to be extra safe, use 3-3.5% instead. Market conditions matter too—retiring into a bear market means you might want to be more conservative at first.
When should I start saving for retirement?
Now. Like, right now. Starting at 25 with $200/month beats starting at 35 with $400/month—the early starter ends up with way more money despite contributing less total. That's compound interest doing its thing. But if you're starting later, don't panic—just start with whatever you can today. Even $50/month is better than waiting another year.
Should I prioritize 401(k) or Roth IRA contributions?
Here's the order: 1) Contribute enough to your 401(k) to get the full employer match (that's free money), 2) Max out a Roth IRA if you're eligible ($7,000 in 2024, $8,000 if 50+), 3) Go back and max out your 401(k) ($23,000 in 2024, $30,500 if 50+). Traditional vs Roth depends on whether you think you'll be in a higher tax bracket now or in retirement.
How does Social Security factor into retirement planning?
Social Security covers about 40% of what you made before retirement for average earners—it's a foundation, not the whole thing. Your benefit is based on your highest 35 earning years. You can claim at 62 (but you get less), wait until your full retirement age (66-67 depending on when you were born), or delay until 70 (and get more). Check your Social Security statement online to see your estimated benefits.
What investment return should I assume for retirement planning?
For planning purposes, 6-7% annually for a balanced portfolio is realistic. If you want to be conservative (which isn't a bad idea), use 4-5%. The S&P 500 has historically averaged around 10% since 1957, and bonds around 4-6%, but there's a ton of year-to-year variation. Don't plan assuming you'll hit 10% every year—some years you'll be up 20%, others down 15%.
How do I account for inflation in retirement planning?
Inflation averages 2-3% per year, which means your money buys less over time. If you need $50,000/year now, you'll need $90,000+ in 20 years just to maintain the same lifestyle. Healthcare inflation is even worse at 5-7% annually. Build this into your plan by being conservative with your return estimates, and consider putting some money in TIPS (Treasury Inflation-Protected Securities) which adjust for inflation.
What are the biggest retirement planning mistakes to avoid?
Starting too late is #1. Not taking the full employer match. Being 100% bonds when you're 25. Cashing out your 401(k) when you switch jobs. Claiming Social Security at 62 when you don't need to. Not planning for healthcare costs. And underestimating how long you'll live—plan for your 90s, not your 80s.
How do healthcare costs affect retirement planning?
Medicare doesn't cover everything, and healthcare gets expensive. A healthy 65-year-old couple needs around $300,000 saved just for medical costs throughout retirement. If you can, max out an HSA while you're working—it's triple tax-advantaged. Consider a Medicare supplement plan and maybe long-term care insurance. Budget for 5-7% annual increases in healthcare costs.
Should I pay off my mortgage before retiring?
It depends. If your mortgage rate is below 4-5%, you might be better off investing that money instead. But there's something to be said for the peace of mind of not having a mortgage payment—plus it lowers how much you need to withdraw each year. Consider how much you have in emergency savings, your other debts, and how you'd feel about carrying a mortgage into retirement.
How do I create a retirement withdrawal strategy?
A common approach: withdraw from taxable accounts first, then tax-deferred (401k/traditional IRA), then Roth last. This spreads out your tax hit. Don't forget about required minimum distributions (RMDs) starting at 73. Some people use a 'bucket strategy'—cash for years 1-5, bonds for 6-15, stocks for 16+. This way you're not forced to sell stocks in a down market.
When can I access my retirement accounts without penalties?
Age 59½ for 401(k)s and traditional IRAs—withdraw before that and you'll pay a 10% penalty plus income tax. Roth IRA contributions (not earnings) can come out anytime tax-free and penalty-free. There are some exceptions: first home purchase (up to $10k), education expenses, major medical bills, or setting up equal periodic payments (SEPP). But in general, this money is meant to stay put until you're close to retirement.