The 4% rule says you can withdraw 4% of your portfolio in the first year of retirement, then raise that dollar amount with inflation each year, and historically your money would have lasted 30+ years in roughly 90% of market outcomes. It comes from back-testing US stock and bond returns. Early retirees and low-return environments often use 3.5% instead.

How do I calculate how long my retirement savings will last?

Divide your annual spending by your real return to get the break-even point: if withdrawals stay below the interest your portfolio earns at real returns, it never runs out; above it, the runway is months = ln[1/(1 − P×i/W)] ÷ ln(1+i), where P is the portfolio, W the monthly withdrawal, and i the monthly real return. Example: $1,000,000, withdrawing $5,000 per month at 4% real returns, lasts about 27 years; withdrawing $3,333 per month, the interest covers spending indefinitely.

What return rate should I use in a retirement calculator?

Use real (inflation-adjusted) returns so results come out in today's dollars: roughly 4–5% for a stock-heavy portfolio, 2–3% for bonds, and about 5% for a balanced 60/40 mix, based on long-run US history. Real return = (1 + nominal return) ÷ (1 + inflation) − 1, so a 6% nominal return with 3% inflation is about 2.9% real.

How much should I save each month for retirement?

A common target is 15% of gross income including any employer match. Starting early matters more than the amount: $300 per month at 7% from age 25 grows to about $787,000 by 65, while starting at 35 yields about $366,000 — the ten-year delay costs roughly $421,000.

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Retirement Calculator Guide: Will You Have Enough to Retire Comfortably?

Q: How much do I need to retire?

A common benchmark is 25 times your expected annual retirement expenses (the 4% rule). If you need $50,000 per year from your portfolio, you need $1,250,000. Subtract other income such as Social Security — the average retired-worker benefit in 2026 is about $2,070 per month — from your expenses before applying the rule.

Q: Is a retirement calculator the same as a 401(k) calculator?

No. A retirement savings calculator projects any portfolio — current balance plus monthly contributions at an assumed return — and applies the 4% rule to translate it into income. A 401(k) calculator models the employer plan specifically: salary, contribution percentage, employer match, annual raises, and IRS contribution limits. Use the 401(k) calculator for plan decisions and the retirement calculator for the whole picture.

Retirement Planning · Projection formula, the 4% rule, FIRE targets, inflation, updated 2026

Every retirement plan comes down to two questions: what will I have? and how long will it last? Both have exact answers — one is a compound-growth projection, the other is the 4% rule and its runway arithmetic. Our free retirement calculator runs the projection instantly, and this guide teaches you every formula behind it, from the nest-egg math to FIRE targets and the inflation correction most people get wrong.

The Projection Formula: What You'll Have

Your portfolio at retirement is your current savings growing plus every contribution growing with it:

portfolio = P × (1+r)ⁿ + PMT × [((1+r)ⁿ − 1) ÷ r]

where P is your current savings, PMT your monthly contribution, r the monthly return (annual rate ÷ 12) and n the number of months (years × 12). This is exactly how the retirement calculator computes it — monthly compounding, contributions added at the end of each month.

Worked example: $50,000 saved, adding $500 per month, 6% annual return, 25 years to retirement. Here r = 0.5% per month and n = 300, so the growth factor (1.005)³⁰⁰ ≈ 4.465:

Lump sum: 50,000 × 4.465 = $223,248
Contributions: 500 × ((4.465 − 1) ÷ 0.005) = 500 × 693.0 = $346,497
Portfolio at retirement: $569,745 — from $200,000 invested, so growth more than doubles what you put in

From Nest Egg to Income: The 4% Rule

A number in the bank is not an income. The most widely used bridge is the 4% rule: withdraw 4% of the portfolio in year one, raise that dollar amount with inflation each year, and historical back-testing shows the money lasting 30+ years in roughly 90% of market outcomes. Dividing by 4% is the same as multiplying annual spending by 25:

target portfolio = annual expenses × 25 (at 4%)
Need $50,000/year from the portfolio → $50,000 × 25 = $1,250,000

More conservative withdrawal rates raise the multiple: 3.5% → ×28.6, 3% → ×33.3 (often used for early retirees); a bolder 5% → ×20. The example portfolio above — $569,745 — supports about $22,790 per year at 4%, well short of $50,000. That gap is not a verdict; it's an input for the next calculation.

Also subtract income you won't need from the portfolio: the average retired-worker Social Security benefit in 2026 is roughly $2,070 per month (about $24,850 per year after the 2.8% COLA). A couple with two benefits and modest expenses may need to fund only half their budget from savings — which shrinks the target by half.

How Long Will My Savings Last?

The reverse question has a clean answer. Withdrawing a fixed amount each month, your money lasts as long as the real return covers the excess of withdrawals over growth. If withdrawals stay below what the portfolio earns (at real returns), it never runs out; above that, the runway is:

months = ln[1 ÷ (1 − P×i/W)] ÷ ln(1+i), with P = portfolio, W = monthly withdrawal, i = monthly real return

Worked example: $1,000,000, spending $5,000 per month, 4% real return:

$1,000,000 × 0.04 ÷ 12 = $3,333 of interest per month; you withdraw $5,000, so the gap drains the principal
Runway: ln[1 ÷ (1 − 0.0333)] ÷ ln(1.00327) ≈ 326 months ≈ 27 years

Now cut spending to $3,333 per month: withdrawals exactly match the interest, the principal never shrinks, and the money lasts indefinitely. That boundary is precisely why the 4% rule exists — it's the withdrawal rate that historically survived the drawdowns of a 30-year retirement.

Worked Examples

Example 1 — starter plan: $10,000 saved + $300/month at 7% for 30 years → (1.00583)³⁶⁰ ≈ 8.1165 → 10,000 × 8.1165 + 300 × 1,220 ≈ $447,200 (from $118,000 invested).

Example 2 — lump sum only: $200,000 at 5% for 15 years, no contributions → 200,000 × (1.00417)¹⁸⁰ = $422,700. Compounding alone nearly doubles it.

Example 3 — the cost of waiting: $300/month at 7% starting at 25 (40 years) → $787,400; starting at 35 (30 years) → $366,000. The ten-year delay costs about $421,000 — starting a decade earlier more than doubles the outcome on identical contributions.

Example 4 — bridging the gap: back to the first example ($50,000 + $500/month, 25 years, 6%) with a $1,250,000 target. Required monthly saving: (1,250,000 − 223,248) × 0.005 ÷ (4.465 − 1) ≈ $1,482/month. Knowing you need ~$1,000 more per month — today, not at 60 — is the single most actionable number a retirement calculator produces.

FIRE Math: Lean, Coast, and Fat

The FIRE (Financial Independence, Retire Early) community uses the same formula with different goals. All of them start from the FIRE number = annual spending × 25–33 (4% down to 3% withdrawal rates, since early retirees face a longer horizon):

Lean FIRE: frugal spending, e.g. $30,000/year × 25 = $750,000
Fat FIRE: comfortable spending, e.g. $100,000/year × 25 = $2,500,000
Coast FIRE: the checkpoint after which you can stop contributing entirely. Coast number today = target ÷ (1+g)ᵗ. Example: targeting $1,250,000 at 65, currently 30, expecting 6% real growth: 1,250,000 ÷ 1.06³⁵ ≈ $162,600. Have that invested by 30, keep it invested, and compounding does the rest — no more contributions needed.

Inflation: Use Real Returns, Not Nominal

A projection at 6% nominal returns answers the wrong question — its dollars won't buy today's amounts. Convert to a real return first:

real return = (1 + nominal) ÷ (1 + inflation) − 1. At 6% nominal and 3% inflation: 1.06 ÷ 1.03 − 1 ≈ 2.9% real

Re-running the first example at 2.9% gives $323,800 in today's purchasing power — not the $569,745 nominal figure, and not the $272,000 you'd get by wrongly deflating the whole total by 25 years of inflation (contributions made in later years shouldn't be deflated the full 25 years). The real-rate method handles this correctly and keeps every number in today's dollars. Long-run US history puts real returns near 7% for all-stock portfolios and 2–3% for bonds — about 5% for a classic 60/40 mix. Use our inflation calculator to see what today's expenses will cost at your expected inflation rate.

Benchmarks by Age: Are You on Track?

Financial institutions commonly publish savings milestones as multiples of salary: 1× by 30, 3× by 40, 6× by 50, 8× by 60, 10× by 67. A $70,000 earner should hold about $210,000 at 40 and $700,000 at 67. The good news is how cheap the early years are: a 25-year-old saving just $230 per month at 7% reaches $700,000 by 67. The 15%-of-gross-income guideline (including employer match) meets these benchmarks at 6–7% returns — and the 401(k) calculator shows exactly how employer matching gets you there faster.

How to Use Our Retirement Calculator

The retirement calculator runs entirely in your browser — nothing is uploaded:

Enter your current savings, monthly contribution, expected annual return, and years to retirement.
Click Calculate — the tool shows the projected total and the amount you actually invested, so you can see the growth share at a glance.
Apply the 4% rule to the result — multiply the total by 0.04 for a sustainable first-year income — and compare it against your annual spending target.

Use real returns to plan in today's dollars, then stress-test: run the projection at 1–2% lower return and see whether the plan survives. If it does, you've built in a margin of safety no single projection can give you.

Common Mistakes to Avoid

Mixing nominal and real: projecting at 7% nominal but comparing against today's expenses overstates readiness by roughly double the inflation rate every year. Pick today's dollars + real returns (or future dollars + nominal) and stay consistent.
Assuming the average return arrives on schedule: a portfolio earning 7% over 30 years may earn −10% in the five years right before you retire. Sequence risk is why the withdrawal multiple drops (3–3.5%) for early retirees and why shifting gradually toward bonds near retirement is standard advice.
Forgetting Social Security: the average retired-worker benefit is about $2,070/month in 2026 — ignoring it makes your target needlessly intimidating, while counting on more than your own estimate (check your ssa.gov statement) makes it too rosy.
Ignoring fees: a 1% annual fee turns a 7% return into 6%, and over 30 years costs roughly a quarter of your final balance. Index funds with expense ratios near 0.1% are the default for a reason.
Forgetting taxes on withdrawals: traditional 401(k)/IRA balances are pre-tax — $1,000,000 there is not $1,000,000 of spendable income. Roth balances are. Know your mix before applying the 4% rule.
Set-and-forget planning: a retirement projection is a snapshot. Re-run it annually and after any raise, job change, or market shock — the plan that gets revisited is the plan that works.

Frequently Asked Questions

How much do I need to retire? A common benchmark is 25× your expected annual expenses from the portfolio. Needing $50,000/year means a $1,250,000 target — and Social Security (average ~$2,070/month in 2026) reduces what your savings must cover.

What is the 4% rule? Withdraw 4% of the portfolio in year one, adjust that dollar amount for inflation yearly, and back-testing shows 30+ years of survival in ~90% of historical outcomes. Early retirees often use 3.5% instead.

How do I calculate how long my savings will last? Compare withdrawals to the real interest your portfolio earns: $1,000,000 paying out $5,000/month at 4% real returns lasts about 27 years; at $3,333/month the interest covers it forever.

What return rate should I use? Real returns in today's dollars: ~4–5% stock-heavy, 2–3% bonds, ~5% for a 60/40 mix. Real = (1+nominal) ÷ (1+inflation) − 1.

How much should I save each month? The standard target is 15% of gross income including match. Timing dominates size: $300/month from age 25 ends near $787,000; from 35, only ~$366,000.

Is a retirement calculator the same as a 401(k) calculator? No — the retirement calculator projects any portfolio and converts it to income via the 4% rule; the 401(k) calculator models salary, contribution %, employer match, raises, and IRS limits. Use both together.

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