Retirement Calculator

A widely used guideline is the "25× rule" — save 25 times your expected annual retirement expenses. If you plan to spend $50,000/year in retirement, you need $1,250,000. This is based on the 4% safe withdrawal rate, which research (the Trinity Study) suggests can sustain a 30-year retirement with a balanced portfolio.

The 4% rule states that you can withdraw 4% of your portfolio in year one of retirement, then adjust for inflation each year, with a high probability of not running out of money over a 30-year retirement. For example, with $1,000,000 saved, you could withdraw $40,000/year. The rule was derived from the Trinity Study (1998) using historical U.S. stock and bond returns.

The IRS limit for 401(k) contributions in 2024 is $23,000 ($30,500 if age 50+). Financial advisors typically recommend contributing at least enough to get your employer's full match (free money), then aiming for 15% of gross income including the match. If you can't do 15% immediately, increase by 1% per year.

For long-term planning, most financial advisors recommend using 6%–7% annually for a diversified portfolio (roughly 60% stocks / 40% bonds). The S&P 500 has historically returned ~10% before inflation and ~7% after inflation. Using 7% is a conservative, inflation-adjusted assumption appropriate for retirement projections.

Full retirement age for Social Security depends on birth year — it's 67 for anyone born 1960 or later. You can claim Social Security as early as 62 (with a 30% reduction in benefits) or delay until 70 (gaining an 8% increase per year after full retirement age). The right age depends on your health, savings, and benefit optimization strategy.

A 401(k) is an employer-sponsored plan with a 2024 contribution limit of $23,000. An IRA (Individual Retirement Account) is opened independently with a 2024 limit of $7,000 ($8,000 if 50+). Traditional versions of both offer pre-tax contributions; Roth versions offer tax-free withdrawals in retirement. A key difference: 401(k) plans may include employer matching; IRAs offer more investment choices.