Retirement Calculator
Plan your path to financial independence. Calculate when you can retire based on your current savings, income, expenses, and investment returns.
Your retirement projection will appear here.
How to Use the Retirement Calculator
- Enter Current Situation: Age, current savings, income, and annual expenses
- Set Investment Assumptions: Expected return rate and inflation
- Define Retirement Goals: Safe withdrawal rate and desired spending
- Calculate: See when you can retire and how much you'll have
Understanding the 4% Rule
The 4% rule is a retirement planning guideline based on the Trinity Study (1998). It states that you can safely withdraw 4% of your retirement portfolio in the first year, then adjust for inflation each year, with a high probability your money will last 30+ years.
Example: With a $1,000,000 portfolio and 4% withdrawal rate, you can withdraw $40,000 in year 1. If inflation is 3%, you'd withdraw $41,200 in year 2, and so on.
Required Portfolio Size
Formula: Annual Expenses ÷ Withdrawal Rate = Required Portfolio
Example: $40,000 annual expenses ÷ 0.04 = $1,000,000 needed to retire
FIRE Movement: Financial Independence, Retire Early
The FIRE movement focuses on aggressive saving and investing to achieve financial independence decades before traditional retirement age.
FIRE Variations
- Lean FIRE: Retire early with minimal expenses (often $30k-$40k/year)
- Fat FIRE: Retire early while maintaining a luxury lifestyle ($100k+/year)
- Barista FIRE: Partial retirement with part-time work for healthcare/extras
- Coast FIRE: Save enough early so investments grow to fund retirement, stop saving, work for current expenses only
Savings Rate Impact
| Savings Rate | Years to Retirement | Notes |
|---|---|---|
| 10% | 51 years | Traditional retirement age |
| 25% | 32 years | Above average saver |
| 50% | 17 years | Aggressive FIRE approach |
| 65% | 10.5 years | Very aggressive FIRE |
| 75% | 7 years | Extreme FIRE (very rare) |
Assumes 5% real return (after inflation). Source: Mr. Money Mustache
Investment Return Assumptions
Historical Returns
- S&P 500 (stocks): ~10% nominal, ~7% after inflation (1926-2023)
- Bonds: ~5-6% nominal, ~2-3% after inflation
- 60/40 Portfolio: ~8% nominal, ~5% after inflation
- Inflation: ~3% historical average (US)
Conservative vs. Aggressive Assumptions
- Conservative: 5-6% return, 3% inflation (real return: 2-3%)
- Moderate: 7% return, 3% inflation (real return: 4%)
- Aggressive: 9-10% return, 3% inflation (real return: 6-7%)
Recommendation: Use 6-7% for projections. It's better to be pleasantly surprised than disappointed.
Frequently Asked Questions
Is the 4% rule really safe?
The original Trinity Study showed 4% had a 95% success rate over 30 years (1926-1995). Recent studies suggest 3.5% may be safer with today's lower bond yields and higher stock valuations. For early retirement (40+ year timeframe), consider 3.5% or dynamic withdrawal strategies.
What if I retire early? Should I use a lower withdrawal rate?
Yes. The 4% rule was designed for 30-year retirements. For 40+ years, consider 3.5%. For 50+ years, consider 3.25-3.5%. The longer your retirement, the more conservative your withdrawal rate should be.
Should I include Social Security in my calculations?
It's wise to plan without Social Security and treat it as a bonus. If you want to include it: estimate your benefit at ssa.gov, reduce by 25% to be conservative (system solvency concerns), and don't count it until you're eligible (62-67+ depending on birth year).
How much do I need to retire?
Rule of thumb: 25-30x your annual expenses. With $40k/year expenses: $1M-$1.2M needed. With $80k/year: $2M-$2.4M needed. Use 25x for 4% rule, 30x for more conservative 3.33% withdrawal rate.
What about healthcare before Medicare (age 65)?
Major expense for early retirees. Options: (1) ACA marketplace ($300-$1500/month), (2) Spouse's employer plan, (3) Part-time job with benefits (Barista FIRE), (4) Health sharing ministry. Budget $6k-$20k/year for a couple before 65.
Should I pay off my mortgage before retiring?
Depends on interest rate and risk tolerance. High rate (5%+): probably pay off. Low rate (3% or less): may be better to keep mortgage and invest the difference. Many retirees sleep better debt-free regardless of math.
What's a realistic savings rate?
Average American: 3-5%. Good saver: 15-20%. FIRE seeker: 30-70%. Your rate depends on income, expenses, and timeline. Even increasing from 10% to 15% dramatically shortens time to retirement.
💰 Strategies to Retire Earlier
- Increase Income: Side hustles, job changes, skills development can boost savings rate dramatically
- Reduce Major Expenses: Housing (50-30% of spending), cars (go used/paid off), food (cook at home)
- Optimize Taxes: Max 401(k)/IRA, HSA, tax-loss harvesting, Roth conversions
- Geographic Arbitrage: Move to lower cost of living area or state with no income tax
- Invest Aggressively Early: Higher stock allocation when young for growth potential
- Track Spending: You can't optimize what you don't measure—track every dollar for 2-3 months
Common Retirement Planning Mistakes
Underestimating Healthcare Costs: Fidelity estimates $315k for a 65-year-old couple's healthcare in retirement (2023). Budget accordingly.
Lifestyle Inflation: As income grows, expenses often grow too. Conscious frugality and maintaining a savings rate is key.
Sequence of Returns Risk: A market crash early in retirement can devastate a portfolio. Keep 2-3 years of expenses in cash/bonds as a buffer.
Ignoring Taxes: Traditional 401(k)/IRA withdrawals are taxed as income. Roth conversions, tax-advantaged accounts, and withdrawal strategies matter hugely.
This calculator provides estimates based on assumptions and historical data. Actual investment returns, inflation, and personal circumstances vary. This is not financial advice. Consult with a certified financial planner for personalized retirement planning. Past performance does not guarantee future results.