# How much do I need for retirement?

Computes the savings you need at retirement for the income you want, what your savings and contributions grow to by then, the extra monthly saving that closes a gap, and how long the money lasts.

- Page: https://www.acalculator.org/finance/retirement-calculator
- JSON spec: https://www.acalculator.org/finance/retirement-calculator.json
- Version: 01f8ca2d965d

## Default answer

Example with the default inputs (Your age now 35, Age you retire 67, Plan for money until age 90, Savings now $50,000.00, You save $500.00, Raise your saving each year by 0%, Yearly return before retirement 6%, Yearly return in retirement 5%, Inflation 3%, Income you want in retirement $5,000.00, Social Security and pensions $0.00): To retire at 67 on the income you want, you need about $2,835,674.63; on your plan you will have $882,847.05.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| age | Your age now | Your age today, in whole years. |
| retire | Age you retire | The age you stop saving and start living on your savings. |
| until | Plan for money until age | The age your savings should last to. |
| savings | Savings now | What you have saved for retirement today, in every account together. |
| save | You save | What you add to your retirement savings, per month or per year. A yearly amount is split into 12. |
| raise | Raise your saving each year by | The percent your saving goes up at the start of each new year, for example with pay raises. |
| rate | Yearly return before retirement | The yearly return on your savings until you retire. It stays the same every year. |
| rateafter | Yearly return in retirement | The yearly return on what is left once you retire. It stays the same every year. |
| inflation | Inflation | How fast prices rise each year. Your income need grows at this rate. |
| income | Income you want in retirement | The income you want each month (or year) in retirement, in today’s money. |
| other | Social Security and pensions | Income you expect from Social Security, pensions and other sources in retirement, in today’s money. Your savings pay the rest. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| need | You need at retirement | The savings at your retirement age that pay the income you want (less Social Security and pensions), rising with inflation, until the age you plan to. |
| projected | You will have at retirement | Your savings now plus your saving, grown at the return before retirement, when you retire. |
| short | Shortfall | How much less you will have than you need. Shown only when you are short. |
| spare | More than you need | How much more you will have than you need. Shown only when you are not short. |
| extra | Save this much more each month | The extra monthly saving (in year 1, rising like your saving) that closes the shortfall by your retirement age. |
| firstWithdrawal | First monthly withdrawal | The income you want less Social Security and pensions, grown by inflation to your retirement age. |
| needToday | You need, in today’s money | The savings you need at retirement ÷ (1 + inflation) to the power of the years until then. |
| outAge | Your savings run out at age | Your retirement age plus the months with a withdrawal ÷ 12. Shown when the money runs out. |
| left | Left at the age you plan to | Your savings at the end of the plan, when they last. Shown when the money lasts. |

## Method

Saving years: each month the balance grows by (1 + R)^(1/12) − 1, then the saving is added. Retirement: W = (income − Social Security and pensions) × (1 + inflation)^(years to retirement), taken at the start of each month and raised by inflation each year; savings needed = W × a × Σ ((1 + inflation) ÷ (1 + R₂))^k, with a the value of 12 start-of-month payments of 1.

## Assumptions

- Returns stay the same every year. Real returns go up and down, and a bad year early in retirement matters most.
- Your saving is added at the end of each month and rises at the start of each new year. Withdrawals are taken at the start of each month and rise with inflation each year.
- The income you want and your Social Security and pensions are in today’s money and rise with inflation.
- Taxes, fees and required minimum distributions are not included.
- This is an estimate for planning, not financial advice.

## Worked examples

1. age = 40, retire = 48, until = 49, savings = $0.00, save = $250.00, rate = 3.815129%, rateafter = 0%, inflation = 0%, income = $0.00 gives projected = $27,938.20. Source: OpenStax, Contemporary Mathematics, section 6.6 "Methods of Savings", Example 6.59 (https://openstax.org/books/contemporary-mathematics/pages/6-6-methods-of-savings): $27,938.20 after 8 years.
2. age = 60, retire = 65, until = 70, savings = $100,000.00, save = $1,000.00, rate = 0%, rateafter = 0%, inflation = 0%, income = $3,000.00, other = $1,000.00 gives need = $120,000.00, projected = $160,000.00, spare = $40,000.00, left = $40,000.00, firstWithdrawal = $2,000.00. Source: OpenStax, Contemporary Mathematics, section 6.6 (https://openstax.org/books/contemporary-mathematics/pages/6-6-methods-of-savings) at 0%.
3. age = 30, retire = 40, until = 50, savings = $0.00, save = $1,000.00, rate = 0%, rateafter = 0%, inflation = 0%, income = $2,000.00 gives need = $240,000.00, projected = $120,000.00, short = $120,000.00, extra = $1,000.00, outAge = 45.
4. age = 35, retire = 67, until = 90, savings = $50,000.00, save = $500.00, rate = 6%, rateafter = 5%, inflation = 3%, income = $5,000.00 gives need = $2,835,674.63, projected = $882,847.05, short = $1,952,827.58, extra = $1,743.04, firstWithdrawal = $12,875.41, outAge = 73.166667.

## FAQ

### How much do I need to retire?

Enough savings to pay the income you want, less Social Security and any pension, for every year from your retirement age to the age you plan to. The calculator grows that income with inflation until you retire and through retirement, and lets the savings keep earning a return while you spend them.

### How much should I save each month for retirement?

Enter what you save now. If you will have less than you need, the calculator shows the extra monthly amount that closes the gap by your retirement age, rising each year like your saving. Starting earlier makes it smaller, because each dollar has longer to grow.

### What return should I use?

The yearly return on your mix of investments after fees. A lower number is more cautious. Returns are never guaranteed and change from year to year, so try a few rates and see how much the answer moves.

### Why does inflation matter so much?

Because prices keep rising for decades. At 3% a year, $5,000 a month today costs about $12,875 a month in 32 years. The calculator asks for your income in today’s money and grows it for you, so the answer is in the money of your retirement year.

### Should I include Social Security?

Yes, if you expect it. Enter your estimated benefit in today’s money under Social Security and pensions, and your savings only need to pay the rest. Your Social Security statement at ssa.gov shows your estimate at different claiming ages.

### How long will my money last?

The calculator runs your savings month by month from today to the age you plan to. If the money runs out first, it shows the age it runs out; if not, it shows what is left at the end.

### Does this include taxes?

No. Withdrawals from traditional 401(k)s and IRAs are taxed as income, and Roth withdrawals usually are not. If most of your savings are pre-tax, aim for a higher income than you want to spend.

## Sources

- OpenStax, Contemporary Mathematics, section 6.6 "Methods of Savings" (future value of an ordinary annuity, Example 6.59). https://openstax.org/books/contemporary-mathematics/pages/6-6-methods-of-savings
- U.S. Securities and Exchange Commission, Investor.gov, Compound interest calculator (monthly deposits and yearly growth). https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
- Social Security Administration, my Social Security (your benefit estimates). https://www.ssa.gov/myaccount/
- U.S. Bureau of Labor Statistics, Consumer Price Index (inflation). https://www.bls.gov/cpi/