Retirement Savings Calculator

You are on track when 4% of the portfolio you will have on the day you stop work covers the income you want, less Social Security and any pension. That single comparison is what this calculator makes, after growing your savings and contributions to your retirement age and inflating your goal and your benefits to the same year.

With the calculator's defaults, a hypothetical 58-year-old with $1,200,000 saved, adding $2,500 a month with a 15% match, and planning to stop at 65, reaches $2,103,569 at a 6% return. The goal of $130,000 a year in today's dollars becomes $159,884 by then at 3% inflation, and Social Security of $4,800 a month becomes $70,841 a year. The portfolio has to supply $89,043; 4% of it is $84,143. The result is a shortfall of $4,900 a year, which about $1,024 a month more in contributions would close. Drawing the full need anyway, rising with inflation, the savings still last about 43 years at a steady 6% return: the 4% test is deliberately cautious, because real returns are not steady.

More than at any other age. Catch-up contributions start in the year you turn 50, and since 2025 a larger catch-up applies in the years you turn 60 through 63 (IRS). For a couple who both work, each spouse has their own limits.

One change arrives this year. If your wages from the employer sponsoring the plan were over $150,000 in the prior year, the catch-up part of your contributions must go in as Roth money (IRS). It no longer lowers this year's tax, but it comes out tax-free and is not counted for required minimum distributions or the income that sets Medicare IRMAA surcharges. The tax optimization calculator shows what the rule does to your bill.

In the calculator, enter the combined monthly amount you and your spouse will actually contribute, and remember that a contribution you cannot make does not help: if the shortfall figure asks for more than the limits allow, the answer lies elsewhere.

It is usually the largest lever you still control. Every dollar of guaranteed, inflation-adjusted income reduces the portfolio you need by about 25 dollars under the 4% rule, and the age you claim changes the benefit permanently. For anyone born in 1960 or later, full retirement age is 67 and claiming at 62 cuts the benefit by 30% (SSA). Waiting past full retirement age adds 8% a year until 70, after which there is no further increase (SSA).

Retiring and claiming are separate decisions. Many couples stop work at 63 or 65, live on the portfolio for a few years, and let the higher earner claim at 70, because the larger benefit also becomes the survivor's benefit. To model that here, run the calculator with your planned retirement age and the benefit at the age you will claim, and add the bridge years' withdrawals to your income goal. The guide to claiming Social Security and the Social Security estimator help set the figure.

Close the gap with time and income before you reach for returns. In the last decade before retirement, contributions have only a few years to grow, so the extra-monthly figure is often large. Four levers are usually more powerful:

• Work one to three years longer. Each year adds contributions and growth, raises Social Security, and removes a year of withdrawals. In the example tab, moving from 63 to 65 turns a five-figure gap into a near match.
• Delay Social Security. Eight percent a year of inflation-adjusted, lifetime income is hard to buy anywhere else.
• Trim the goal in the early years. Spending often falls naturally in the late 70s and 80s; a goal 10% lower in the first decade makes a large difference to the portfolio's survival.
• Use the house. Downsizing, relocating to a lower-cost state or paying off the mortgage all shrink the withdrawal; see the guide to downsizing in retirement.

What rarely works is raising the expected return in the calculator. A portfolio shifted toward stocks to chase a higher number carries more risk of a large fall just as withdrawals begin, which is the one thing a late saver can least afford.

Because losses early in retirement are locked in by the withdrawals you take during them. Two retirees with the same average return over 30 years can end far apart if one meets a bear market in year two and the other in year twenty. This calculator uses a steady return, so it cannot show that risk; treat its answer as the plan under average conditions.

The usual defenses are a cash reserve of one to two years of withdrawals, sized with the retirement cash reserve calculator; a bond allocation large enough to fund several more years without selling stocks; and the willingness to cut discretionary spending for a year or two after a fall. The order you draw from taxable, tax-deferred and Roth accounts matters as well, for both taxes and survival; the guide to retirement withdrawal order covers it.

• Income tax. Enter a pre-tax income goal. Withdrawals from traditional accounts are taxed as ordinary income; Roth withdrawals and most of a taxable account's principal are not.
• Required minimum distributions from 73, or 75 if born in 1960 or later. See the guide to Roth conversions before RMDs.
• Medicare costs and IRMAA. Put premiums in your income goal; the Medicare and IRMAA guide explains the income-related surcharges.
• Long-term care. A few years of care can cost more than any other retirement expense and is usually planned separately; see the long-term care planning guide.
• Fees and market swings. Use a return net of fees, and read the result as an average-case plan.