Free Retirement Calculator

Calculate the savings you need to retire at the age you want

How much money do you need to retire comfortably? How much do you need in your 401K at 50, 60, or 65 to retire? How much will you receive in social security benefits? This free retirement calculator includes 401K, pension, and social security to help you determine what it will take for you to retire and what adjustments you should make to reach your retirement goals. Start by filling out the info below. Happy calculating!

Using this free retirement calculator

Annual Contribution Rate

Insert the percentage of your annual income that you expect to contribute to savings. This should include 401K as well as any other savings. Most employers match 401K contributions, in which case include your employer's contribution in this number. For example, if you contribute 4% of your annual income to your 401K and your employer matches 4%, input 8% in this field.

Savings Annual Return Rate

Insert the expected annual return rate for your savings prior to retirement here. An expected annual return rate for retirement savings prior to retirement can vary depending on the type of investment and the individual's risk tolerance. Historically, a commonly used benchmark for stock market investments is an average annual return of around 10%. However, it's important to note that past performance does not guarantee future results and actual returns can be higher or lower. Also note that you may have a higher tolerance for risk at a younger age and will likely have a lower tolerance for risk closer to your planned retirement age. Consider these factors when choosing your expected annual rate of return in this field as this value is intended to represent your average return between current age and retirement age. With that said, it is generally considered to be a conservative estimate to use a rate of around 7%

Pension (Annuities and Lump Sum)

A pension is a retirement savings plan that provides a steady stream of income to the individual during their retirement years. There are two main types of pensions: annuities and lump sum payout. An annuity is a financial product that pays out a fixed stream of payments to the individual at fixed intervals, typically monthly. A lump sum, on the other hand, is a one-time payment made to the individual upon reaching retirement age. The individual can then use this lump sum to invest in other retirement savings options, such as stocks, bonds, or real estate. Employers are increasingly moving towards lump sum payouts. Your employer may provide an annuity, a lump sum, a choice between the two, or even a mix of both. Additionally, you may have different pensions from different employers. This model allows you to input the sum of each of those options to calculate your benefits in retirement.

Social Security Income

Social Security benefits are designed to partially replace a portion of a person's income during retirement, providing financial security and reducing poverty among the elderly. To keep up with inflation and the increasing cost of living, the Social Security Administration regularly adjusts the benefit amounts to ensure that they keep pace with inflation. This adjustment, called the Cost of Living Adjustment (COLA), is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and is typically made once a year, usually in December. The COLA helps to maintain the purchasing power of Social Security benefits over time.

How much will I spend in Retirement?

It's recommended that you plan to spend about 70-90% of your pre-retirement income during retirement. However, this percentage can vary depending on various factors such as your expected lifestyle, health and long-term care expenses, and inflation. This calculator assumes you will spend 80% of your pre-retirement income. It's important to consider your unique situation and create a retirement plan that works for you. Keep in mind that if you have debt or other expenses, it may be necessary to spend less than 70-90% of your pre-retirement income. It's also a good idea to have a cushion of savings for unexpected expenses. Working with a financial advisor can help you determine the right amount for you to save and spend in retirement based on your specific goals and needs.

What is a nest Egg?

A nest egg is a sum of money set aside for a specific purpose, such as retirement. Building a nest egg throughout your career is essential to ensure that you have enough money to live comfortably in retirement. Without a nest egg, you may struggle to cover your living expenses, healthcare costs, and other needs in your golden years. By starting to build your nest egg early and making consistent contributions over time, you can take advantage of the power of compound interest and achieve a comfortable retirement. In this article, we provide some tips on how to build a nest egg and achieve your retirement goals.

Financial Independence, Retire Early (FIRE) Movement

The Financial Independence, Retire Early (FIRE) movement has been gaining traction in recent years, particularly among millennials. The FIRE movement is a lifestyle choice that prioritizes financial independence and early retirement, with the ultimate goal of achieving financial freedom and being able to retire early. This movement has become increasingly popular in response to changing economic and social circumstances that have made traditional retirement planning more difficult to achieve.

How Inflation Affects Retirement Planning

Inflation can have a significant impact on retirement planning. If you don't take inflation into account when creating a retirement plan, you may underestimate the amount of money you will need in retirement. This can lead to financial difficulties in the future as the cost of living continues to rise.

Inflation erodes the purchasing power of money over time. This means that the same amount of money will buy fewer goods and services in the future than it does today. This has a significant impact on retirement planning because retirement planning involves projecting future expenses and income. This article explains what you can do to mitigate the impact of inflation on your retirement plans.