Retirement Calculator

Calculate how much you need to save for retirement and if you're on track to meet your goals.

Current Age Your current age in years

Retirement Age Age when you plan to retire

Current Retirement Savings Total amount already saved for retirement

Annual Contribution Amount you plan to contribute each year

Expected Annual Return (%) Average annual return on investments

Desired Annual Retirement Income Annual income you want in retirement (in today's dollars)

Expected Inflation Rate (%) Average annual inflation rate

Life Expectancy Age to which you expect to live

Investment Risk Tolerance

Annual Contribution Increase: 3%

Include Social Security Benefits

Quick Examples:

How to Use This Calculator

Enter your current age and planned retirement age
Input your current retirement savings and planned annual contributions
Set your expected investment return rate and inflation rate
Specify your desired retirement income and life expectancy
Click Calculate to see if you're on track for retirement

Formula Used

Future Value = PV × (1 + r)^n + PMT × ((1 + r)^n - 1) / r

Where:

PV = Present Value (current savings)
PMT = Annual contribution
r = Annual interest rate (as a decimal)
n = Number of years until retirement

Example Calculation

Real-World Scenario:

Sarah is 35 years old and wants to retire at 65. She currently has $50,000 in retirement savings and plans to contribute $10,000 annually. She expects an average return of 7% on her investments and wants to have $60,000 per year in retirement income.

Given:

Current Age = 35 years
Retirement Age = 65 years
Current Savings = $50,000
Annual Contribution = $10,000
Expected Return = 7%
Desired Income = $60,000/year

Calculation:

Years until retirement = 65 - 35 = 30 years

Future Value of Current Savings = $50,000 × (1 + 0.07)^30 = $381,426

Future Value of Contributions = $10,000 × ((1 + 0.07)^30 - 1) / 0.07 = $945,330

Total Retirement Savings = $381,426 + $945,330 = $1,326,756

Result: Sarah will have approximately $1.33 million at retirement, which would provide an annual income of about $53,200 (assuming a 4% withdrawal rate), slightly below her desired income.

Why This Calculation Matters

Practical Applications

Determine if you're saving enough for retirement
Understand how different contribution levels impact your retirement
See how investment returns affect your retirement timeline

Key Benefits

Helps you set realistic retirement goals
Identifies potential shortfalls in your retirement plan
Allows you to adjust your strategy while you still have time

Common Mistakes & Tips

Many people underestimate their retirement expenses, especially healthcare costs. A common rule of thumb is to plan for 70-80% of your pre-retirement income, but this may vary based on your lifestyle and health needs. Consider inflation and unexpected expenses when planning.

While being too optimistic about returns is risky, being overly conservative can lead to saving more than necessary or working longer than needed. Consider a balanced approach based on your age and risk tolerance, and remember that your asset allocation should change as you approach retirement.

Even modest inflation can significantly reduce your purchasing power over time. At 3% inflation, prices double in about 24 years. Make sure your investment returns outpace inflation to maintain your lifestyle in retirement.

Frequently Asked Questions

A common guideline is to save 10-15% of your income for retirement, but this varies based on your age, current savings, and retirement goals. Financial experts often recommend having saved 1x your annual salary by age 30, 3x by 40, 6x by 50, and 10x by retirement age.

The traditional guideline is the "4% rule," which suggests you can safely withdraw 4% of your retirement savings in the first year of retirement, then adjust that amount for inflation each year. However, some experts now recommend 3-3.5% due to longer life expectancies and lower expected returns.

The best time to start saving for retirement is as early as possible. Thanks to compound interest, starting in your 20s can make a significant difference. If you're starting later, you may need to save a higher percentage of your income or delay retirement to reach your goals.

References & Disclaimer

Financial Disclaimer

This retirement calculator provides estimates based on the information you provide and certain assumptions. These calculations are for educational purposes only and should not be considered financial advice. Actual results may vary based on market conditions, investment performance, and other factors. Please consult with a qualified financial professional before making investment decisions.

References

Social Security Retirement Planner - Official Social Security Administration tool for estimating benefits
The Four Percent Rule Explained - Investopedia article on safe withdrawal rates
Consumer Financial Protection Bureau Retirement Tools - Government resources for retirement planning

Accuracy Notice

This calculator assumes consistent returns and contributions, which may not reflect real-world market volatility. It does not account for taxes, fees, or other factors that may impact your actual retirement savings. The results should be used as a starting point for retirement planning rather than a definitive projection.

About the Author

Kumaravel Madhavan

Web developer and data researcher creating accurate, easy-to-use calculators across health, finance, education, and construction and more. Works with subject-matter experts to ensure formulas meet trusted standards like WHO, NIH, and ISO.

Connect with LinkedIn

Tags:

finance personal-finance retirement investment tax

Related Calculators