Retirement Planning Calculator: How Much Will You Need?

Retirement means stepping away from active work, usually for the rest of your life. Most people retire between ages 55 and 70, but the timing depends on health, finances, and personal choice. Some may semi-retire or return to work part-time.

Why Retire?

People retire for many reasons: health, age, job stress, or simply wanting more free time. The most important factor is whether you can afford to retire. Relying only on Social Security is risky, as it typically replaces just about 40% of your working income.

How Much Should You Save?

There’s no one-size-fits-all answer, but here are some common guidelines:

• 10% Rule: Save 10–15% of your pre-tax income each year.
• 80% Rule: Plan to need 70–80% of your pre-retirement income each year in retirement.
• 4% Rule: To estimate your needed nest egg, divide your desired annual retirement income by 4%. For example, $100,000/year ÷ 4% = $2.5 million.

Remember, inflation reduces your money’s buying power over time, so it’s important to factor it into your planning.

Common Sources of Retirement Income

• Social Security: Government benefits, usually replacing about 40% of your working income.
• Employer Plans: 401(k), 403(b), and pension plans, often with employer matching.
• IRAs: Traditional and Roth IRAs offer tax advantages for retirement savings.
• Investments: Stocks, bonds, mutual funds, real estate, and CDs can help grow your savings.
• Personal Savings: Emergency funds and savings accounts are important for short-term needs, but may not keep up with inflation.
• Other Sources: Home equity (reverse mortgages), annuities, passive income (like rental properties or dividends), and inheritance.

Planning for Retirement

Start saving early, take advantage of employer matches, and diversify your investments. Consider inflation, healthcare costs, and your desired lifestyle. Use our Retirement Calculator to estimate how much you’ll need, how much to save, and how long your money will last.