Retirement Calculator

How long will your money last in retirement? Use this calculator to get quick answers. Then create a free account on the award winning NewRetirement Planner to see how you compare, see what’s possible and find easy ways to improve.

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All About Retirement Calculators

U.S. dollar bills stacked

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

  • Perhaps you are in your 20s or 30s and wanting to achieve early financial independence.
  • If you are 40 or 50, your most pressing concerns might be worrying about your kids and mortgage but you know retirement is looming.
  • If you are closer to the traditional retirement age of 65, then you really need reliable feedback on whether or not you will have a secure financial future.

Research suggests that these are the four retirement questions that everyone wants answered:

1. Retirement Income & Expenses

Most people spend their working years focused on saving & building a nest egg for retirement, however they are still left with the challenge of how to convert that nest egg into a stream of retirement income that exceeds their projected expenses.

This calculator solves for both at a high level

  • Income: we illustrate your average expected retirement income in today's dollars across your expected income sources, including Social Security, any Pension and Withdrawals from Savings at a 4% “safe” withdrawal rate.
  • Expenses: we illustrate your average expected retirement expenses in today's dollars, which is comprised of projected household, medical, and housing expenses, as well as estimated income and capital gains taxes.
Build a Complete NewRetirement Plan

2. Will you 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), 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!

3. How much do you need for retirement?

This tool is unique because it calculates how much you have as well as how much you need for three different ages.

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 each month?
  • 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.

4. What is your net worth now? What will it be in the 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?

The tool above allows you to find out how much you have now in different sources of wealth and whether or not you will have anything left to pass on.

Other Common Retirement Questions

There are so many retirement questions. And, you need personalized and detailed answers!

Switch to the NewRetirement Planner to get ALL the answers you need:

Common Retirement Questions

How This Retirement Calculator Works

calculator on desk with office supplies

This quick 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.

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.

What Assumptions Are Being Used?

In addition to the data you can edit, this retirement calculator uses the following assumptions:

  • Goal age is set to life expectancy plus 10 years, based on current age
  • Inflation Rate is set to 3% (2% for optimistic and 4% for pessimistic)
  • Income growth rate is set to 2.5% (3% for optimistic and 2% for pessimistic)
  • Social Security adjusts for inflation
  • Medical Cost Inflation Rate is set to 4% (2.5% for optimistic and 5.5% for pessimistic)
  • Out of pocket medical expenses after 65 are estimated using national averages
  • Consumer has not purchased long term care insurance
  • Savings rate of return is set to 3% (4% for optimistic and 2% for pessimistic)
  • Housing appreciation rate is set to 2.5% (3% for optimistic and 2% for pessimistic)
  • Income taxes are calculated using 2017 tax table brackets and standard deductions, inflation adjusted until goal age
  • Starting at age 70.5, the calculator estimates required minimum distributions
  • All values entered and displayed in "today’s" dollars

For a more accurate projection, including the ability to specify different income sources, break out expenses, and edit assumptions, create a free account to use the full NewRetirement Planner.

What Makes a Useful Retirement Plan?

Everyone knows that they need a retirement plan. But that means different things to different people. And, not every plan is a truly useful retirement plan.

What makes a 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?

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:

  1. Track your expenses (Do this in detail in the NewRetirement Planner)
  2. Lower your expenses and increase your savings rates - ideally to > 30% of your income
    1. 30% savings rate = 28 years to retirement / financial independence
    2. 40% savings rate = 22 years
    3. 50% savings rate = 17 years
    4. 60% savings rate = 12.5 years
  3. Invest efficiently
  4. 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:

Why Should You Use a Retirement Calculator?

Most people have lived their lives day to day, month to month, year to year.

However, in retirement you need a fixed set of financial resources to last you 20 to 30 years or more.

You want to spend this time of your life doing what you want to do and you want to make sure you have the finances and wherewithal to achieve what is important.

Using a quick tool like the one at the top of this page or the more detailed retirement planner can help you achieve your retirement goals.

Furthermore, the research has clearly found that having a written retirement plan gives people better financial outcomes and makes retirees more confident and less stressed.

How to Improve Your Retirement Projections

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, 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.

  • If you have a pension, make sure you use a retirement calculator with pension controls
  • Think through future changes to expenses
  • Add any upcoming big one time costs
  • Plan for changes to your housing situation
  • And more...

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. Here are more reasons it is important for couples to discuss retirement plans.

If you are single, here are tips for solo seniors.

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.

The Social Security break even calculator is an interesting way to see this in action. You can use it here or as part of the NewRetirement Planner.

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.

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.

More Retirement Calculator Resources