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How This Simple Retirement Calculator Works

The retirement calculator above will give you quick answers to the most common retirement planning questions.

Here is how it works:

The tool starts with default answers to the calculator inputs. The default data reflects an average 50 year old.
You should personalize the calculation by updating any and all of the inputs in the “About Me” section.
Each chart will update with every change you make. This feature makes it easy for you to see if you are doing better or worse than the average retirement calculator user.
Keep making changes to see if you can improve your calculations.
Or, switch to the NewRetirement Planner to plan with a greater number of important details.

Additional Information About Reliable Retirement Planning

You may also want to read on for important information about reliable retirement planning:


How Much Do I Need to Retire?


Figuring out how much you need is not entirely simple. The answer depends on a wide variety of factors. To start, you will want to consider:

How much do you want to spend in retirement each month? How will your spending change during retirement?
How long will you live?
How much do you need for healthcare expenses?
Do you have a pension? How much will you get from Social Security?
What will happen to your investments?
Will inflation remain steady?
And so much more…

You need to be able to project your expenses forward into the rest of your life to calculate how much savings you actually need.

And, the more detailed you can get with the inputs for retirement calculations, the more reliable your answer will be.

There is no one simple calculation to the question of how much do I need. You need a personalized answer.

To get a personalized and reliable answer, we recommend that you create a free account and create a detailed retirement plan with the NewRetirement Planner. This is an award winning do it yourself system that is almost like working with a fiduciary financial advisor.

Use the NewRetirement Planner to find out how much YOU really need.




When Can I Retire?


You can retire when you have sufficient assets and income to cover your expenses for as long as you are going to live -- no matter how long that turns out to be.

So, calculating when you can retire is like calculating how much you need -- it is a highly personalized calculation.

There is no magic retirement age or number. You don’t need some set amount of savings. You just need to match your spending to your assets and income.

Determining your retirement age is not a matter of your birthday, it is a detailed balance sheet math problem.

The NewRetirement Planner -- do it yourself online planning -- will help you determine the best age to retire for maximum wealth, security and happiness.

Use the NewRetirement Planner to find out when YOU can really retire.


What is the Average Retirement Income?


What is the average retirement income? Are you anywhere close to average?

The average retirement income numbers for Americans over 65 seen below comes from the US Census Bureau. The most recent data available is from 2017 and compiled in 2018. So, all of the economic changes we have seen over the last year are not necessarily represented in the data below.

However, the following numbers should be very close to reality for the average household

Average Household Retirement Income 2020:

Median Income — $43,696
Mean Income — $67,238

However, retirement income tends to drop dramatically with age. Read Average Retirement Income: How Do You Compare to see income by age and source.

The NewRetirement Planner -- a comprehensive DIY retirement calculator -- can help you figure out a retirement income plan.




What is My Net Worth Now? Future?


Put simply, net worth is everything you own minus everything that you owe.

The typical American’s net worth at age 65 is $194,226. However, a big part of that number — almost three quarters of it — is home equity. If you exclude home ownership, the average net worth is only $43,921. That is probably not quite enough for a comfortable retirement.

Is your net worth better than average? Read How Do You Compare: Average Cash, Savings Home Equity and Other Balances to bench mark yourself on a wide variety of financial metrics.

To more accurately calculate your current and future net worth, you should use the NewRetirement Planner -- a comprehensive and personalized retirement calculator. It is an easy to use tool that offers very personalized and reliable results.


Will I Run Out of Money?


If you are worried about running out of money in retirement, you are not alone. Running out of money is the main concern of most people in or approaching retirement.

And, the concern is warranted. A detailed report by the Employee Benefit Research Institute (EBRI) found that many of us are in fact very likely to run out of money.

83 percent of baby boomers in the lowest income quartile will run out of money in retirement
47 percent of boomers in the second lowest quartile will run out
28 percent of boomers in the second highest quartile will run out
13 percent of boomers in the highest income quartile will run out

Yikes!

However, if your calculations above suggest that you will run out of money in retirement — it doesn’t actually mean that you will be completely penniless.

Running out of money in retirement usually means that you have used up all of your retirement savings and your home equity and are left with whatever income streams you might have — Social Security or a pension if you are lucky.

The above data refers to people who will be retired for 35 years. The data is only slightly better if you are living in retirement for 20 years — but even then a full 81 percent of the lowest income quartile and 8 percent in the highest income quartile will run out of money.

You Have Options: If your retirement calculations suggest that you will run out of money, don’t despair, you have options! Working a little longer, delaying the start of Social Security, spending less and tapping into your home equity are easy ways to have a secure retirement. See below for more information and ideas!

Want more information, try one of these articles:

Or, get personalized recommendations for improving your plan when you start using the NewRetirement Planner  -- a personalized and comprehensive retirement calculator.




What Assumptions Does This Simple Retirement Calculator Use?


In addition to the data you can edit using this simple retirement calculator, the following assumptions are being used to make your calculations:

Key Assumptions

Goal age is your life expectancy (based on your age) plus 10 years
Your work income ends at age 66 and a Social Security benefit of $1500 begins at your specified age
You own a $250,000 home with a $100,000 mortgage at a 4% interest rate
Out of pocket medical expenses after 65 are estimated using national averages and you don’t have long term care insurance
Starting at age 72, your income includes required minimum distributions
Income taxes are calculated using 2017 tax table brackets and standard deductions, inflation adjusted
All values are in “today’s” dollars

Rates

Inflation rate is 3%
Income growth rate is 2.5%
Social Security adjusts with inflation
Medical costs grow at 4%
Rate of return is 3%
Housing appreciates at 2.5%

Don’t recognize yourself in these assumptions? You can personalize everything listed above and so much more in the  Free NewRetirement Planner  -- it is a comprehensive and personalized retirement calculator.


How Do I Build a Useful Retirement Plan?


Your 401k is not your “retirement plan.” Saving money is a foundational element of a retirement planning, but it is far from everything you need to consider and it is not necessarily the key to your long-term wealth and security.

A retirement plan is a written document showing all aspects of your current and future income, expenses, debts, and assets.

A retirement plan is a detailed roadmap to your financial security now and forever.

How do you get this detailed roadmap? Forbes Magazine called the NewRetirement Planner  a “new approach to retirement planning.” It is an easy-to-use, comprehensive, do-it-yourself planning system.

These tools make it easy and convenient to create and maintain a detailed and flexible retirement plan. Get started now…

What makes a retirement plan useful?

Comprehensiveness: A useful retirement plan touches on all aspects of your financial life in retirement.

Understandable: Very few people feel like they have mastered personal finance. However, retirement is the time to gain a basic understanding of how your money works. Using a retirement calculator (or a more comprehensive retirement planner) is a great way to get a hands on understanding of your finances.

Personalization: The more you can customize the assumptions when planning, the better your plan will be. You are not like anyone else and it is unlikely that all of the assumptions used by a calculator apply to you.

Maintainable: A useful retirement plan is not something you spend an hour or two on at one time. You need to be able to update your plan anytime something changes or at least quarterly.

Evolving: What you need from a retirement calculator will change over time. When you are working, a calculator can help you see how much you are saving. When you retire, a calculator should help you determine how to turn those savings into retirement income.




What is FIRE? (Financial Independence, Retire Early)


FIRE (Financial Independence Retirement Early) is a movement around living efficiently and achieving financial independence — essentially another word for retirement. Adherents live frugally and save as much as possible so they can gain more control over their lives.

The basic approach is:

Track your expenses (Do this in detail in the NewRetirement Planner )
Lower your expenses and increase your savings rates - ideally to > 30% of your income
30% savings rate = 28 years to retirement / financial independence
40% savings rate = 22 years
50% savings rate = 17 years
60% savings rate = 12.5 years
Invest efficiently
Get your investable savings to be >= 25X your expenses (30X is safer)

The tool above is a high level calculator that makes a number of assumptions (see above) to give you quick insight into your situation.

FUN FACT: If you achieve financial independence in the tool above, you will see a FIRE icon. This is a fun way to introduce the idea of financial independence and FIRE to more people and reward those who have achieved it since it’s an alternative approach to retirement than that provided by the traditional financial services industry.

We highly recommend that you explore the NewRetirement Planner so that you fully model your situation and get full control.

FIRE Assumptions:

We are only running it for a person’s Optimistic case now
We deduct guaranteed income streams (Social in this simple tool) from expenses
We are ignoring typical end of life healthcare and life long term care costs that cause many people to fall out of FIRE at the end of their lives.

You can learn more about FIRE here:


How Can I Improve My Retirement Plan?


Don’t expect to get the results you want the first time you use a retirement calculator — very few people do.

If you are disappointed to see that you don’t have enough money or can’t retire early enough, don’t despair. Make a few tweaks and you can probably get the retirement results you want!

Here are the best strategies for improving your retirement calculations

1. Get More Detailed

This retirement calculator gives good results. However, you should get a lot more detailed if you want reliable predictions about your future.

Switch from the retirement calculator to the NewRetirement Planner for more comprehensive planning.

2. Include Your Spouse

It may seem obvious, but it is actually important to remember to include loved ones — especially spouses — in your retirement planning. A survey by Fidelity Investments found that finances and retirement planning are extremely difficult subjects for married couples.

Going through a retirement calculator can be an excellent way to really get into the details with your loved one(s). Just make sure you use one for couples.

Learn more about using a retirement calculator for couples. And, if you are single, here are tips for solo seniors.

And, here are 8 topics to tackle if you want to survive retirement with your spouse.

3. Delay Social Security

The longer you wait to start benefits, the bigger your monthly Social Security check will be. If you wait until at least your full retirement age (around 66), your check will be about 30% larger than if you started at 62. And, delaying until 70 gets benefits that are 75% higher.

Use the NewRetirement Planner -- a comprehensive and personalized retirement calculator -- to help you figure out the best time to start Social Security.

4. Work Longer

If you work longer, either by delaying retirement or with some kind of retirement job, you can boost your retirement calculator results.

The NewRetirement Planner gives you options for varying your work income over time

5. Evaluate Tapping Home Equity

If you own your home, it is likely your most valuable asset. Home equity is becoming an increasingly popular way to help fund retirement.

Switch from the retirement calculator to the NewRetirement Planner and you can see how getting a reverse mortgage, downsizing, securing a home equity loans and more can really improve your retirement results.

6. Reduce Expenses

Retirement security is not dependent on huge savings accounts and big incomes. You can be secure in retirement even at a very low-income level — so long as your expenses are low too.

Downsizing and living frugally can give you a secure retirement at any income level.

7. Save More

If you’re still very young, saving more should be easy. Max out your 401(k) contributions or start an IRA, and keep up the contributions. Before you know it you’ll have a tidy sum and be ready for a secure retirement.

If you’re midway through your working years, it’s a little tougher. Look for ways to cut back so that you can save more. And if you’re 50 or older, you get a boost. Catch-up contributions for 401(k) and IRA plans raise your max contributions by $6,000 annually in 2017, according to the IRS.

8. Make Tradeoffs for Better Results

Life is messy. You have competing priorities, values, interests.

When you first gather all of your financial information, it is unlikely that you will have documented your perfect retirement plan.

It is likely that you will need to make some adjustments and even assess tradeoffs. For example:

Do you want to retire earlier and spend less in retirement? Would you be willing to downsize your home to afford more travel? Is it more important for you to guarantee adequate income or go for high returns on your investments?

9. Make it Personal

Building a retirement plan requires some use of assumptions — things that are accepted as true or as certain to happen but without proof.

To have a useful retirement plan, it needs to be as personalized as possible. This retirement calculator gives you control over a lot of details. However, to make your plan as personal as possible, switch to the NewRetirement Planner.

10. Save Your Info So You Can Make Updates Over Time

Retirement planning is not something that you do once and forget about forever more. You will want to learn a little more about different topics, try different scenarios in your plan and, make updates at least quarterly or whenever anything about your finances change.

You should evaluate and update your whole plan and do a retirement check every time there is a change to any aspect of your health, finances or lifestyle.

Small changes can have a big impact over your lifetime.

The NewRetirement Planner is designed to be a tool that you can use over time to keep your plans updated.






Want More? Here Is Some of Our Most Popular Retirement Planning Content



From figuring out how early you can retire to planning your estate and everything in between, NewRetirement can help you be wealthier and more financially secure.

Here are some of our most popular articles:



About NewRetirement


NewRetirement was founded by financial and technology experts who discovered that their own parents — professionals who hadn’t saved quite enough — needed help figuring out how to retire. There were no trustworthy and affordable resources that addressed anything beyond investments.

Now NewRetirement helps hundreds of thousands of people every month to develop detailed DIY retirement plans and discover ways to be wealthier, more secure and feel more confident and happier about their future.