Retirement Planning Calculator
Plan your retirement savings with inflation adjustment, monthly contributions, and income projections using the 4% rule. This calculator estimates your retirement corpus and whether you are on track. For a simpler estimate, try our retirement calculator or plan your withdrawals with the annuity payout calculator.
How to Plan for Retirement
- Determine how many years until retirement (retirement age minus current age).
- Estimate your expected investment return rate (historically 8-10% for diversified portfolios).
- Account for inflation (historically 2-3% in developed countries, 5-6% in developing).
- Calculate the future value of current savings plus regular contributions.
- Apply the 4% rule: you can safely withdraw 4% of your corpus annually in retirement.
Formula
Retirement Corpus = FV(Current Savings) + FV(Monthly Contributions)
FV(Savings) = Current Savings x (1 + return)^years
FV(Contributions) = Monthly x [(1+r)^n - 1] / r x (1+r)
where r = monthly return, n = months
Inflation-Adjusted = Corpus / (1 + inflation)^years
Monthly Income (4% Rule) = Corpus x 0.04 / 12
The 4% rule suggests withdrawing 4% annually
to make savings last 30+ years in retirement.Example
Age 30, retiring at 60, $50,000 saved, contributing $1,000/month at 10% return with 3% inflation:
Years to retirement = 30
Monthly return = 10% / 12 = 0.833%
FV of $50,000 = $50,000 x (1.10)^30 = $872,470
FV of $1,000/mo = $1,000 x [(1.00833)^360 - 1] / 0.00833 x 1.00833
= $1,000 x 2,171 = $2,171,321
Total Corpus = $872,470 + $2,171,321 = $3,043,791
Inflation-Adjusted = $3,043,791 / (1.03)^30 = $1,253,456
Monthly Income (4%) = $3,043,791 x 0.04 / 12 = $10,146/month
Total Contributed = $50,000 + ($1,000 x 360) = $410,000
Growth = $3,043,791 - $410,000 = $2,633,791 (compounding!)Retirement Savings Reference Table
| Monthly Savings | 20 Years @ 8% | 25 Years @ 8% | 30 Years @ 8% | 35 Years @ 8% |
|---|---|---|---|---|
| $500 | $296,474 | $478,683 | $750,148 | $1,154,588 |
| $1,000 | $592,947 | $957,367 | $1,500,295 | $2,309,175 |
| $1,500 | $889,421 | $1,436,050 | $2,250,443 | $3,463,763 |
| $2,000 | $1,185,894 | $1,914,733 | $3,000,590 | $4,618,350 |
| $3,000 | $1,778,842 | $2,872,100 | $4,500,886 | $6,927,525 |
| $5,000 | $2,964,736 | $4,786,833 | $7,501,476 | $11,545,875 |
Corpus from monthly contributions only (excludes existing savings)
Frequently Asked Questions
What is the 4% rule?
The 4% rule states you can withdraw 4% of your retirement savings in the first year, then adjust for inflation each year, and your money should last at least 30 years. It is based on historical stock/bond returns. You need 25x your annual expenses saved.
How much do I need to retire?
A common target is 25x your annual expenses (based on the 4% rule). If you spend $60,000/year, you need $1.5 million. Adjust upward for inflation and healthcare costs. Some financial planners suggest 30-33x for extra safety.
What return rate should I assume?
A diversified stock portfolio has historically returned 8-10% before inflation. A balanced portfolio (60/40 stocks/bonds) returns about 7-8%. Use conservative estimates (7-8%) for planning to avoid shortfalls.
How does inflation affect retirement planning?
Inflation erodes purchasing power over time. At 3% inflation, $1 million in 30 years has the purchasing power of about $412,000 today. Always plan in inflation-adjusted terms or use real returns (nominal return minus inflation).
When should I start saving for retirement?
As early as possible. Starting at 25 vs 35 with the same monthly contribution can result in 2-3x more at retirement due to compounding. Even small amounts invested early grow significantly over 30-40 years.