Retirement Calculator

The short answer

• Work out the yearly gap between the spending you want and the Social Security and pensions you will get.
• The 4% rule says you need about 25 times that gap saved: a $36,000 gap points to $900,000 in today’s dollars.
• Social Security rose 2.8% in 2026; the average retired worker gets about $2,071 a month.
• If you’re short, saving more, retiring later, spending less and claiming Social Security later all help.

How the calculator works

The calculator runs your plan in two stages.

1. Saving. Your current savings and monthly saving grow at the return you set until your retirement age, month by month.
2. Spending. From retirement, it takes out each year’s gap between spending and Social Security, both rising with inflation, at the start of the year, and grows what’s left at your retirement return.

It also works out the nest egg you would need at retirement to pay the gap every year to your plan-to age, and, if you are short, the extra monthly saving that closes the gap. Everything is before tax, so enter spending as the amount you would need before paying any tax on withdrawals.

A worked example

With 2.5% inflation, the $1,609,349 at 67 is worth about $730,275 in today’s dollars, and the amount needed is about $684,218. The balance peaks at retirement and then falls, to about $1,050,949 at 85 and $343,710 at 92.

How much you will spend

A common starting point is 70% to 80% of your income before retirement. You stop saving for retirement and paying Social Security and Medicare tax on wages, and commuting and work costs fall. But travel, hobbies and health care often rise, especially in the first years.

Better still, build a retirement budget from your current spending:

• Housing: will your mortgage be paid off? Property tax, insurance and upkeep continue.
• Health care: Medicare premiums, supplemental coverage and out-of-pocket costs.
• Everyday living, transport, travel and gifts.
• Tax on withdrawals from traditional 401(k)s and IRAs.

Social Security in 2026

Social Security benefits rose by 2.8% from January 2026, the cost-of-living adjustment (COLA) based on inflation. The Social Security Administration estimates the average retired worker’s benefit rose from $2,015 to about $2,071 a month, or about $24,850 a year. The maximum benefit at full retirement age is $4,152 a month.

Your own benefit is based on your highest 35 years of earnings, adjusted for wage growth. The best source is your my Social Security account at ssa.gov, which shows estimates at 62, at full retirement age and at 70. Enter the yearly amount for the age you plan to claim, in today’s dollars; the calculator raises it with inflation, as COLAs do.

When to claim Social Security

1. Age 62Earliest claim: up to 30% less

   For anyone born in 1960 or later, claiming at 62 pays 70% of the full benefit, for life.

2. Age 67Full retirement age

   The full benefit for anyone born in 1960 or later.

3. Age 70Maximum: 24% more

   Delayed retirement credits add 8% for each year you wait past 67, up to 70.

Waiting raises your check for life and the benefit your spouse could receive as a survivor. Claiming early can make sense if your health is poor or you need the income. If you retire before you claim, your savings must cover the full spending until Social Security starts, which the calculator doesn’t model separately: lower the Social Security figure to reflect an early claim, or add the bridge years to your spending.

The gap your savings must fill

The gap is spending minus Social Security and pensions. It drives everything else. In the example, $60,000 of spending and $24,000 of Social Security leave a $36,000 gap. Without Social Security, the same person would need about $2,513,084 at 67 instead of $1,507,850, and the money would run out at 81. With $30,000 of Social Security, the need falls to $1,256,542.

The 4% rule

The 4% rule comes from studies of US market history in the 1990s. If you take 4% of your savings in the first year of retirement and raise the dollar amount with inflation each year after, a portfolio of stocks and bonds has historically lasted at least 30 years, even through bad markets. Turned around, it means saving 25 times the yearly gap.

It is a starting point, not a law. Retiring very early, with 40 or more years ahead, calls for a lower rate, often 3% to 3.5%. People who can cut spending in bad years can usually start a little higher.

Why two tests can disagree

In the example the calculator says you’re on track, yet the 4% rule says $900,000 and you are on course for $730,275in today’s dollars. Both can be right. The calculator assumes a steady 5% return in retirement and a plan that ends at 92, spending the money down to nothing. The 4% rule is built to survive the worst historical sequences of returns, including a crash just after you retire, over 30 years.

Inflation: the biggest number

Over 32 years at 2.5% inflation, prices rise about 2.2 times. $60,000 of spending today becomes about $132,225 a year at 67, and the $36,000 gap becomes about $79,335 in the first year of retirement. That is why the nest egg needed looks so large in future dollars.

Retiring earlier or later

Each extra year of work helps three ways: another year of saving, another year of growth, and one less year to pay for. In reality the effect is even larger, because claiming Social Security later also raises the check.

Saving more each month

At $500 a month the money runs out at 85, and about $240 a month more would fix it. The easiest way to save more is through work: our 401(k) calculator shows what your employer match adds, and the Roth IRA calculator what tax-free saving on the side could reach.

Returns before and after retiring

The defaults are 7% a year while you save and 5% in retirement, both before inflation. Stocks have earned more than that over long periods, bonds and cash less. As retirement nears, most people move toward more bonds to reduce the risk of a crash just before or after they stop work, so returns tend to fall.

Small changes matter. Dropping the saving return from 7% to 6% cuts the example’s savings at 67 to $1,265,565, and the money then runs out at 86. Dropping the retirement return to 4% raises the amount needed to $1,675,225. Try cautious figures as well as hopeful ones.

How long to plan for

Average life expectancy is a poor planning target, because half of people live longer. The default plan-to age is 92. Planning to 97 instead raises the amount needed in the example to $1,714,922, and the extra monthly saving to $77. Annuities and delaying Social Security are two ways to protect against a very long life, since both pay for as long as you live.

Starting late

A 45-year-old with $150,000 saved and $800 a month, retiring at 67, is on course for $1,196,281, just above the $1,177,930 needed, because fewer years of inflation also mean a smaller target. From 50, catch-up contributions let you put an extra $8,000 into a 401(k) and $1,100 into an IRA each year in 2026, and from 60 to 63 the 401(k) catch-up is $11,250.

Starting early is still far easier. A 25-year-old with $5,000 saved and $400 a month reaches $1,311,258 by 67 but needs $1,930,176 in future dollars, because 42 years of inflation lift the target. About $217 a month more puts them on track. Our compound interest calculator shows how much time adds.

Where to save

• 401(k), 403(b) or 457(b): up to $24,500 in 2026, plus catch-ups, often with an employer match.
• IRA: up to $7,500, plus $1,100 from 50. Roth or traditional.
• Health savings account: for people with a high-deductible health plan; tax-free for medical costs.
• Taxable brokerage account: no limits or early-withdrawal rules, but no tax breaks.

The calculator treats all of these as one pot. For short-term goals before retirement, a savings account is better: see our savings goal calculator.

Taxes in retirement

Withdrawals from traditional 401(k)s and IRAs are taxed as ordinary income. Roth withdrawals are tax-free if qualified. Part of your Social Security may be taxed, and some states tax retirement income. Because the calculator ignores tax, either enter your spending including the tax you expect to pay, or keep a mix of Roth and traditional money so you can control your taxable income each year.

Health care before and after 65

Medicare starts at 65, two years before full retirement age for most people today. If you retire earlier, budget for private coverage until then, which can be expensive. After 65, plan for Part B premiums, a supplement or Medicare Advantage plan, drug costs and dental and vision care, which original Medicare mostly doesn’t cover.

If you're behind

1. Make sure you get your full employer match.
2. Raise your saving by 1% of pay each year, timed with raises.
3. Use catch-up contributions from 50.
4. Consider working two or three years longer, perhaps part time.
5. Delay Social Security toward 70 if you can.
6. Trim planned spending, or plan to downsize your home.

Re-run the calculator once a year: small changes made early are much easier than big ones made late.

Sequence-of-returns risk

Two retirees can earn the same average return and end up in very different places. If markets fall sharply in the first few years of retirement, you sell investments at low prices to pay your bills, and that money never recovers. The same fall late in retirement does much less harm. The calculator assumes a steady return every year, so it can’t show this. A cash buffer of one or two years’ spending, and a willingness to spend a little less after a bad year, both reduce the risk.

Pensions and annuities

A workplace pension or an annuity pays a set income for life, much like Social Security. Add it to the Social Security figure in the calculator, in today’s dollars. If it doesn’t rise with inflation, as many private pensions don’t, enter a little less than today’s amount to allow for its value falling over time.

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