🏦 Retirement Calculator
See how your retirement savings will grow over time. Enter your current age, savings, monthly contributions, and expected return to project your nest egg and monthly retirement income.
How Retirement Savings Grow
Retirement savings grow through compounding — earning returns not just on your contributions but on all previous returns as well. Over 30 or 40 years, this creates an exponential growth curve where the later years generate far more growth than the early ones. This is why starting early, even with small amounts, has such a disproportionate impact on the final balance. Missing a decade of contributions in your 20s can cost more than doubling your contributions in your 40s.
The 4% Withdrawal Rule
The "4% rule" is a widely used guideline from the 1994 Trinity Study suggesting that retirees can withdraw 4% of their portfolio in the first year of retirement, then adjust for inflation annually, with a high probability of the portfolio lasting 30 years. To determine how much you need to retire, divide your expected annual expenses by 0.04 — a $60,000/year lifestyle requires roughly $1.5 million. This is a starting point, not a guarantee; actual outcomes depend on market returns and retirement duration.
401(k), IRA, and Roth Accounts
Traditional 401(k) and IRA contributions reduce your taxable income now, and you pay tax on withdrawals in retirement — beneficial if you expect to be in a lower bracket then. Roth contributions are made with after-tax dollars, and qualified withdrawals in retirement are completely tax-free — beneficial if you expect to be in the same or higher bracket in retirement. Many financial planners recommend contributing to both types for tax diversification. For 2024, the 401(k) contribution limit is $23,000, plus a $7,500 catch-up contribution if you're 50 or older.