Retirement Calculator
Additional Information
Required Retirement Savings:
$0
Projected Savings at Retirement:
$0
Savings Shortfall/Surplus:
$0
Monthly Retirement Income:
$0
Retirement Overview
Retirement marks the transition from active work life to sustained financial independence. Effective planning ensures stability through savings, investments, and strategic use of retirement funds.
Why Retire?
Key factors influencing retirement decisions:
- Health: Physical/mental decline may necessitate leaving the workforce.
- Age: Typically occurs between 55–70, though "semi-retirement" is increasingly common.
- Financial Readiness: Social Security alone replaces ~40% of pre-retirement income—insufficient for most.
How Much to Save for Retirement
| Rule | Guideline | Example |
|---|---|---|
| 10% Rule | Save 10–15% of pre-tax income annually. | 50k/year→50k/year→5k–$7.5k saved yearly. |
| 80% Rule | Aim for 70–80% of pre-retirement income post-retirement. | 100k/year→100k/year→70k–$80k/year needed. |
| 4% Rule | Divide desired annual income by 4% to estimate nest egg. | 100k/year→100k/year→2.5M required. |
Inflation Impact:
- Historically ~2.6% annually in the U.S.
- Mitigation Strategies: Invest in TIPS (Treasury Inflation-Protected Securities), commodities, or dividend stocks.
Sources of Retirement Income
1. Social Security
- Replaces ~40% of pre-retirement income.
- Benefits cap at higher incomes (e.g., 100kearnersreceive 100kearnersreceive 2k/month vs. 20kearnersat 20kearnersat 800/month).
- Explore: Social Security Calculator.
2. Employer-Sponsored Plans
- 401(k)/403(b): Tax-deferred growth; employer matches (e.g., 3% of 60ksalary=60ksalary=1.8k/year).
- Pensions: Fixed payouts or lump sums (common in public sector).
- Explore: 401(k) Calculator | Pension Calculator.
3. IRAs
| Type | Taxation | Best For |
|---|---|---|
| Traditional | Tax-deferred contributions; taxed withdrawal | High earners seeking tax breaks. |
| Roth | After-tax contributions; tax-free growth | Those expecting higher tax brackets later. |
- Explore: IRA Calculator | Roth IRA Calculator.
4. Investments & Savings
- Stocks/Mutual Funds: Higher risk, potential growth.
- CDs/Bonds: Low-risk, steady returns.
- Real Estate: Rental income or reverse mortgages (liquidation option).
- Explore: Investment Calculator | Rental Property Calculator.
5. Annuities & Passive Income
- Annuities: Guaranteed lifetime income (immediate or deferred).
- Passive Streams: Dividends, royalties, or rental income.
- Explore: Annuity Calculator.
Additional Considerations
- Emergency Funds: Maintain liquid savings for unexpected costs.
- Inheritance: Subject to estate taxes; plan with legal/financial advisors.
- Tax Efficiency: Prioritize tax-advantaged accounts (e.g., 401(k), then taxable investments.
Final Note
Retirement planning is highly personalized. Use tools like our Retirement Calculator to model scenarios, and consult a financial advisor to align strategies with your goals. Regularly review savings, adjust for inflation, and diversify investments to secure long-term stability.
