Retirement Calculator

The amount you need to retire at 65 depends on your desired annual spending and income sources. A widely used guideline is the 25x rule: multiply your desired annual retirement spending by 25. If you want $60,000 per year from your portfolio, you need $1,500,000 in savings. This is based on the 4% safe withdrawal rate from the Trinity Study. However, this is your portfolio target — Social Security benefits ($1,500-$3,500/month for most retirees) reduce the amount you need to generate from savings. For example, if Social Security provides $24,000/year and you need $60,000 total, you only need to generate $36,000 from savings, requiring a portfolio of $900,000 instead of $1,500,000. Fidelity suggests having 10x your final annual salary saved by age 67 as a general benchmark.

The 4% rule states that you can withdraw 4% of your retirement portfolio in the first year and adjust that amount for inflation each subsequent year, with a high probability of your money lasting at least 30 years. Developed by financial advisor William Bengen in 1994 and validated by the Trinity Study (1998), the rule was tested against every 30-year period in US stock market history from 1926 onwards. A $1,000,000 portfolio would provide $40,000 in year one, $41,200 in year two (with 3% inflation), and so on. The rule assumes a diversified portfolio of 50-75% stocks and 25-50% bonds. Some current financial planners suggest using a more conservative 3.5% rate given today's lower bond yields and higher valuations, while others argue the original 4% remains sound for a 30-year retirement horizon.

The best time to start saving for retirement is as early as possible — ideally with your first paycheck. The power of compound interest means that money saved in your 20s has far more growth potential than money saved in your 40s or 50s. A person who saves $200/month from age 25 to 65 at a 7% annual return accumulates approximately $525,000. Starting the same savings at age 35 yields only $244,000 — less than half — despite contributing for just 10 fewer years. Even small contributions early in your career establish the savings habit and benefit from decades of tax-deferred compounding. If you are starting later, do not be discouraged: catch-up contributions (available at age 50+), increased savings rates, and strategic planning can still build a meaningful retirement fund. The worst time to start is never.

Inflation erodes the purchasing power of your money over time, making it one of the most significant risks to retirement security. At 3% annual inflation, $100 today will only buy $47.76 worth of goods in 25 years — a reduction of more than half. For retirees, this means the income that seems comfortable today may feel inadequate in 10-20 years. A $4,000 monthly budget in 2026 would need to be $7,225 in 2046 at 3% inflation to buy the same goods and services. To combat inflation, your retirement savings must grow faster than inflation during the accumulation phase (stocks historically return 10% nominal, well above inflation) and your withdrawal strategy must include annual inflation adjustments. Social Security benefits include Cost-of-Living Adjustments (COLAs) tied to the Consumer Price Index, providing some built-in inflation protection for that portion of your retirement income.

The full retirement age (FRA) for Social Security depends on your birth year. For those born in 1960 or later, the FRA is 67. You can claim benefits as early as age 62, but your monthly benefit is permanently reduced by approximately 6.67% per year for each year before your FRA (up to 30% reduction at 62 for a FRA of 67). Conversely, delaying benefits past your FRA earns delayed retirement credits of 8% per year up to age 70, increasing your benefit by 24% compared to claiming at 67. For the average retiree, the break-even point — where total benefits from delaying exceed total benefits from claiming early — is typically around age 80-82. If you are healthy and have other income sources to bridge the gap, delaying Social Security is one of the most powerful guaranteed returns available in retirement planning.

Most financial experts recommend saving 10-15% of your gross income for retirement, including any employer match. The commonly cited guideline is to aim for 15% of gross income starting in your 20s. If you start later, the required rate increases: starting at 35 may require 20-25%, and starting at 45 may require 30%+ to reach the same retirement goal. A practical approach is the 50/30/20 budgeting rule, where 20% of after-tax income goes to savings and debt repayment, with at least half of that directed to retirement. If 15% feels unattainable initially, start with whatever you can and increase by 1-2% each year, especially when you receive raises. The most important step is to automate your contributions so they happen before you have a chance to spend the money.

Your Social Security benefit is calculated using your highest 35 years of earnings, adjusted for wage inflation. The Social Security Administration (SSA) uses these earnings to determine your Average Indexed Monthly Earnings (AIME), then applies a progressive formula with three bend points to calculate your Primary Insurance Amount (PIA) — the monthly benefit you receive at your full retirement age. The 2026 formula replaces 90% of the first $1,226 of AIME, 32% of AIME between $1,226 and $7,391, and 15% of AIME above $7,391. The maximum Social Security benefit at full retirement age in 2026 is approximately $4,018 per month. You can view your estimated benefits by creating an account at ssa.gov/myaccount. Working fewer than 35 years results in zero-earning years being averaged in, which reduces your benefit.

For 2026, the 401(k) employee contribution limit is $24,500 for those under 50. Workers aged 50-59 and 64+ can contribute an additional $8,000 in catch-up contributions for a total of $32,500. Under the SECURE 2.0 Act's enhanced catch-up provision, workers aged 60-63 can contribute an additional $11,250 for a total of $35,750. The total contribution limit (employee plus employer contributions) is $70,000 for 2026 ($77,500 for those 50-59 and 64+, $81,250 for ages 60-63). If your employer offers a Roth 401(k) option, your contributions go in after-tax but grow and can be withdrawn tax-free in retirement. Starting in 2026, employer matching contributions can also be designated as Roth under SECURE 2.0. Maximizing your 401(k) is one of the most impactful retirement savings strategies available.

The Roth versus traditional decision comes down to whether you expect to be in a higher or lower tax bracket in retirement. Traditional 401(k) and IRA contributions are tax-deductible now, reducing your current taxable income, but withdrawals in retirement are taxed as ordinary income. Roth contributions are made with after-tax dollars (no deduction now), but all growth and withdrawals in retirement are completely tax-free. If you are in a low tax bracket now and expect higher income later, Roth is generally better — you pay taxes at today's lower rate. If you are in a high tax bracket now and expect lower income in retirement, traditional may save more in taxes overall. Many advisors recommend tax diversification: contributing to both traditional and Roth accounts. This provides flexibility to manage your taxable income in retirement by choosing which account to withdraw from each year based on your tax situation.

Catch-up contributions are additional amounts that workers aged 50 and older can contribute to retirement accounts beyond the standard limits. For 2026, catch-up contribution limits are: 401(k), 403(b), and 457 plans allow an extra $8,000 for ages 50-59 and 64+ (total $32,500), and an extra $11,250 for ages 60-63 under the SECURE 2.0 enhanced catch-up (total $35,750). Traditional and Roth IRAs allow an extra $1,100 for age 50+ (total $8,600). SIMPLE IRA plans allow an extra $3,850 for age 50+ (total $20,350). Catch-up contributions are powerful for late starters or anyone who could not maximize contributions earlier in their career. A worker who contributes the maximum catch-up amount to a 401(k) from age 50 to 65 at a 7% return would accumulate approximately $401,000 from catch-up contributions alone. Note: under SECURE 2.0, high earners making over $145,000 must make catch-up contributions on a Roth (after-tax) basis starting in 2026.