What is the 4% rule in retirement planning?

The 4% rule (originating from the 1994 Bengen study and updated Trinity study) suggests that a retiree can withdraw 4% of their total portfolio value during their first year of retirement, and adjust that dollar amount annually for inflation, with a high historical probability of not exhausting funds over a 30-year horizon in a balanced stock/bond portfolio.

How much do I need to save to retire comfortably?

Financial planners commonly suggest accumulating 10 to 12 times your peak pre-retirement annual salary by age 67, or saving enough to generate 70% to 80% of your pre-retirement gross annual income through a combination of investment withdrawals, pensions, and Social Security benefits.

Does this calculator include Social Security benefits?

No. This calculator isolates your personal investment portfolio accumulation and drawdown without making assumptions about statutory entitlement benefits. To understand how Social Security Primary Insurance Amount (PIA) and claiming ages affect retirement cash flow, see our dedicated guide on How Does Social Security Affect Retirement Planning.

What rate of return should I assume for retirement calculations?

Historically, a broad-market U.S. stock portfolio (like the S&P 500) has returned roughly 10% nominal and 7% after inflation over long multi-decade holding periods. Conservative retirement models typically use 5% to 7% annual returns during the accumulation phase, dropping to 4% to 5% during retirement as portfolios shift toward fixed-income bonds and capital preservation.

What happens if there is a shortfall in my projected retirement goal?

If your projected nest egg falls short of your desired spending, primary adjustments include: (1) increasing monthly contributions by even 1% to 2% of income, (2) delaying retirement by 1 to 3 years to allow compound interest to continue working while reducing drawdown years, or (3) optimizing tax efficiency between pre-tax 401(k)s and Roth accounts.

What is sequence of returns risk in retirement?

Sequence of returns risk refers to the danger that market declines occur in the immediate years just before or early in retirement when you begin selling portfolio shares to fund living expenses. Selling declining equities permanently impairs principal recovery, significantly increasing portfolio depletion risk compared to experiencing identical market returns later in retirement.

2026 Statutory Rates Primary Source Verified Always 100% Free

Retirement Calculator (2026)

Estimate your retirement nest egg at target retirement age, measure savings pace against future lifestyle spending, and evaluate portfolio longevity.

Quick Answer: A retirement savings plan calculates the future value of current savings and ongoing monthly contributions compounded through retirement age. Assuming an initial retirement savings balance of $250,000 and ongoing monthly contributions of $1,500 compounded monthly at a 7.0% annual investment return over a 25-year accumulation horizon (300 months, from age 40 to 65), your total retirement portfolio will reach exactly $2,646,462.09 ($1,431,354.55 from initial balance growth and $1,215,107.54 from ongoing monthly contributions). Applying the standard 4% withdrawal rule, this portfolio generates $105,858 in annual safe retirement income.

Ages & Current Nest Egg

Current Age

yrs

Retire Age

yrs

Current Retirement Savings Combined 401k, IRAs, brokerage

Monthly Savings Contribution New savings added each month

Annual Investment Return Historical real return is ~6–8%

Annual Spending in Retirement Target living expenses (optional)

Projected Retirement Nest Egg

Monthly Compounding

Projected Savings at Retirement $0 At age 65

Initial Capital Growth $0

New Monthly Savings $0

Safe Annual Income (4% Rule) $0

Plan Target Status On Track

Retirement Cash Flow Feasibility

Primary Source Verified Last reviewed: October 2026

Calculation Methodology: Retirement Calculator (2026)

Mathematical Formula

FV = PV · (1 + r)^n + PMT · [((1 + r)^n - 1) / r]

FV = Total portfolio accumulated at retirement
PV = Current accumulated savings
PMT = Monthly savings contribution
r = Monthly investment rate of return (Annual expected return ÷ 12)
n = Total months until retirement ((Retirement Age - Current Age) × 12)
Sustainable Income: Assesses annual retirement withdrawal capacity using the standard 4% safe withdrawal rule against target spending.

Verified Worked Example (Benchmark)

Benchmark Parameters: Current Savings (PV) = $250,000 · Monthly Contribution (PMT) = $1,500 · Annual Return = 7.00% · Accumulation Horizon = 25 Years (300 months, Age 40 to 65).

Monthly Periodic Rate (r): 0.07 ÷ 12 = 0.0058333333.
Total Compounding Months (n): (65 - 40) × 12 = 300 months.
Growth Factor (1 + r)^n: (1 + 0.0058333333)^300 ≈ 5.72541820.
Future Value of Existing Savings: $250,000 × (1 + 0.07/12)^300 = $1,431,354.55.
Future Value of Monthly Contributions: $1,500 × [((1 + 0.07/12)^300 - 1) ÷ (0.07/12)] = $1,215,107.54.
Total Projected Nest Egg at Retirement: $1,431,354.55 + $1,215,107.54 = $2,646,462.09.

Verification: Recomputed by running the deployed engine with balance $250,000 + $1,500/mo at 7% for 25 years. Yields exactly $2,646,462.09 at retirement.