Retirement Calculator

How much money do you need to retire comfortably?

The most widely used benchmark for retirement savings is 25 times your expected annual expenses in retirement — a figure derived from the 4% safe withdrawal rule. If you expect to spend $60,000 per year in retirement (roughly $5,000 per month), you would need approximately $1.5 million saved. This sounds like a large number, but it is very achievable when you start saving consistently in your twenties or thirties and allow compound growth to work over decades.

Another way to think about it: replace 70–90% of your pre-retirement income. If you earn $80,000 per year before retirement, aim for $56,000–$72,000 of annual retirement income. Some of this will come from Social Security (the average benefit in 2024 was around $1,900 per month), and the rest will need to come from your personal savings and investments.

Your actual retirement number is personal and depends on a number of factors: your expected lifestyle and spending habits, where you plan to live (cost of living varies enormously by location), your health and likely healthcare costs, whether you have a pension or other guaranteed income, and how long you expect to live. As a rough starting point, however, the 25x expenses rule provides a solid foundation for planning.

Understanding the 4% safe withdrawal rule

The 4% rule emerged from research known as the Trinity Study, conducted in 1998 by three professors at Trinity University. They analyzed historical US stock and bond market data and found that a portfolio of 50–75% stocks, with 4% withdrawn in year one (adjusted annually for inflation thereafter), had a very high probability of lasting 30 years without being depleted.

In practice, the rule is used as follows: multiply your expected annual retirement spending by 25 to find your target portfolio size, or divide your total portfolio by 25 to find the safe annual withdrawal amount. This retirement calculator takes your projected savings at retirement and divides it by 25, then by 12, to show you the monthly income it can sustainably support.

It is worth noting that the 4% rule is a guideline, not a guarantee. Some financial planners now recommend a more conservative 3–3.5% withdrawal rate, especially for early retirees who face a longer retirement horizon. The rule also assumes a specific portfolio mix and a 30-year retirement — if you retire at 55 and live to 90, a lower withdrawal rate provides a larger safety margin.

Retirement savings benchmarks by age

Fidelity Investments, one of the world's largest retirement plan providers, publishes well-known savings benchmarks by age to help workers gauge their progress. The guidelines are expressed as multiples of your current salary:

By age 30: 1x your annual salary saved. If you earn $60,000, aim to have $60,000 set aside.
By age 40: 3x your annual salary. The same $60,000 earner should have $180,000.
By age 50: 6x your annual salary — $360,000 for our example.
By age 60: 8x your annual salary — $480,000.
By age 67: 10x your annual salary — $600,000.

These benchmarks assume you will retire at 67 and spend about 45% of pre-retirement income in retirement (with the remainder coming from Social Security). If you plan to retire earlier or spend more, you will need to hit higher multiples. Use these as a compass to check whether you are broadly on track, and use this retirement calculator to get a more precise picture based on your own numbers.

The role of Social Security

Social Security is a foundational component of retirement income for most Americans. The amount you receive depends on your earnings history and the age at which you claim benefits. You can start claiming as early as age 62, but your benefit is permanently reduced. Claiming at your full retirement age (66–67 depending on birth year) gives you your full benefit, and delaying until age 70 increases your monthly payment by about 8% per year beyond full retirement age.

In 2024, the average Social Security retirement benefit was approximately $1,900 per month. Higher earners receive more, up to the maximum of around $3,800 per month for those who claim at full retirement age. While Social Security provides a valuable income floor, it was never intended to replace all pre-retirement income and should be thought of as one piece of the retirement puzzle rather than the whole solution.

401(k) vs IRA: which should you use?

The two most common retirement savings vehicles in the US are the 401(k) and the Individual Retirement Account (IRA). Both offer significant tax advantages, but they work in different ways and have different contribution limits.

A 401(k) is offered through your employer. Contributions are made pre-tax, directly from your paycheck, reducing your taxable income in the year you contribute. Many employers offer matching contributions — for example, matching 50% of your contributions up to 6% of your salary. This employer match is essentially free money and should always be captured first before directing additional savings elsewhere. In 2024, you can contribute up to $23,000 per year to a 401(k), or $30,500 if you are 50 or older.

A Traditional IRA is an individual account you open yourself. Contributions may be tax-deductible depending on your income and whether you have access to a workplace plan. Like a 401(k), the money grows tax-deferred and you pay income tax when you withdraw it in retirement. The 2024 contribution limit is $7,000 per year ($8,000 if 50 or older).

A Roth IRA is funded with after-tax dollars, meaning you get no upfront tax deduction. However, your money grows completely tax-free, and qualified withdrawals in retirement are also tax-free. For many people — especially younger workers who expect to be in a higher tax bracket later — the Roth IRA is the more powerful long-term vehicle. Roth IRAs also have no required minimum distributions, giving you more flexibility in retirement.

How to maximize your retirement savings

The most important step is to start saving immediately, no matter how small the amount. Even contributing $50 per month in your twenties creates a habit and a foundation that compounds powerfully over time. As your income grows, increase your contributions — a common approach is to direct at least half of every raise toward retirement savings so your lifestyle improves while your savings accelerate.

Always capture any employer 401(k) match before putting money elsewhere — this is a guaranteed 50–100% instant return on your money that no investment can match. After capturing the full match, consider maxing out a Roth IRA if you are eligible, then return to maximize your 401(k) contributions. This sequencing gives you both tax-deferred and tax-free growth in retirement, providing flexibility to manage your tax burden later.

Keep your investment costs low. Expense ratios on mutual funds and ETFs directly reduce your returns over time. A difference of 1% in annual fees may seem small, but over 30 years it can consume hundreds of thousands of dollars in potential wealth. Low-cost index funds from providers such as Vanguard, Fidelity, or Schwab are the recommended foundation for most retirement portfolios.

What if you are behind on retirement savings?

Many Americans reach their forties and fifties realizing they have not saved enough. While it is easier to build wealth when you start early, it is never too late to make meaningful progress. Workers aged 50 and older can make catch-up contributions — an extra $7,500 per year in a 401(k) and an extra $1,000 in an IRA in 2024 — specifically designed to help those who started late.

If you are behind, use this retirement calculator to model different scenarios: what happens if you increase your monthly contribution, delay retirement by two years, or accept a slightly lower monthly income target? Often a modest combination of these adjustments is enough to close a significant gap. The key is to take action and make a plan rather than ignoring the shortfall and hoping for the best.

Consider also reducing retirement expenses rather than only focusing on increasing savings. Planning to retire to a lower-cost area, paying off your mortgage before retirement, maintaining good health to reduce healthcare costs, and working part-time in early retirement are all strategies that reduce the portfolio size you need while improving your financial security.