Retirement Calculator

The 4% Withdrawal Rule Explained

The 4% rule is the most widely cited retirement withdrawal guideline. It states that you can withdraw 4% of your retirement portfolio in the first year of retirement, then adjust that dollar amount for inflation each subsequent year, with a high probability (roughly 90%) your money will last at least 30 years. For a $1.2 million portfolio, your first-year withdrawal would be $48,000. If inflation is 3%, year two withdrawal would be $49,440. This rule was developed from historical back-testing of stock and bond returns. While not guaranteed, it provides a practical starting point for planning. Recent research suggests 3.5% may be safer for early retirees or in low-return environments.

Retirement Savings Benchmarks by Age

Financial institutions publish recommended savings milestones. By age 30, aim to have 1x your annual salary saved. By age 40, target 3x salary. By age 50, reach 6x salary. By age 60, accumulate 8x salary, and by age 67, have 10x your salary saved. These benchmarks assume retirement at 67 and a retirement lasting approximately 25 years. Someone earning $70,000 should ideally have $210,000 saved by 40 and $700,000 by 67. These figures are guidelines — your actual target depends on expected expenses, healthcare needs, and desired lifestyle. Use CalcSolver's retirement calculator to compute your personal number.

Social Security Basics

Social Security benefits replace a portion of pre-retirement income based on your highest 35 years of earnings. The full retirement age (FRA) is 67 for those born in 1960 or later. You can claim as early as 62, but benefits are permanently reduced by up to 30%. Delaying past FRA increases benefits by 8% per year up to age 70. The average monthly benefit in 2026 is approximately $1,900, or about $22,800 per year. For most retirees, Social Security alone is not sufficient — it replaces roughly 40% of pre-retirement income for average earners. Plan to cover the remaining 60% through savings and pensions.

401(k) vs. IRA: Which to Use

Both 401(k) plans and IRAs offer tax advantages for retirement saving, but they differ in key ways. A 401(k) is employer-sponsored with a 2026 contribution limit of $23,500 (plus $7,500 catch-up if over 50). Many employers match contributions — free money you should always capture. A traditional IRA allows up to $7,000 in contributions ($8,000 if over 50) with tax-deductible deposits and taxed withdrawals. A Roth IRA uses after-tax contributions but offers tax-free withdrawals in retirement. Ideally, contribute enough to your 401(k) to get the full employer match, then max out a Roth IRA, then return to fill remaining 401(k) space.

Adjusting for Inflation in Retirement

Inflation erodes purchasing power over time. At 3% annual inflation, $50,000 today will have the purchasing power of roughly $27,000 in 20 years. When projecting retirement needs, always use real (inflation-adjusted) returns rather than nominal returns. If your investments earn 7% and inflation is 3%, your real return is approximately 4%. Most retirement calculators, including CalcSolver's, can work with either nominal or real rates. For conservative planning, use real returns of 4-5% for a stock-heavy portfolio and 2-3% for bonds. Historically, US stocks have returned about 7% annually after inflation, while bonds have returned about 2-3% after inflation. A balanced portfolio of 60% stocks and 40% bonds historically yields roughly 5% real returns. Use our inflation calculator to project future costs of living and understand how inflation affects your specific expenses over your expected retirement duration.

Retirement Planning Tips

• Start saving as early as possible — compound growth over decades is the most powerful wealth-building tool available to individual investors.
• Always capture the full employer 401(k) match; failing to do so is leaving free money on the table. A 50% match on 6% of salary is an immediate 50% return.
• Rebalance your portfolio gradually toward bonds and stable value funds as you approach retirement age to reduce sequence-of-returns risk.
• Plan for healthcare costs — Fidelity estimates a 65-year-old couple needs $315,000 for medical expenses in retirement. Consider a Health Savings Account (HSA) as a supplemental retirement vehicle.
• Use our investment calculator to model different return scenarios alongside this retirement planner for comprehensive planning.
• Consider working with a fee-only financial advisor for personalized retirement planning, especially if you are within 10 years of your target retirement date.
• Do not forget to factor in Social Security benefits — they can replace 30-40% of pre-retirement income for average earners, reducing the amount you need to save independently.