Retirement Calculator

How to use this calculator

1. Enter or choose current age.
2. Enter or choose retirement age.
3. Enter or choose plan for income until age.
4. Enter or choose current retirement savings.
5. Enter or choose amount you save each year.
6. The shortfall at retirement (negative = surplus) updates as you type. Use Copy result or Share to keep it.

Method

Savings at retirement = S(1+g)^n + C((1+g)^n − 1)/g; W₁ = (Income − Other) × (1+f)^n; Needed = W₁ × (1 − q^m)/(1 − q), q = (1+f)/(1+h); Extra = Shortfall × g/((1+g)^n − 1)

S

current savings

C

yearly saving (end of each year)

g

return before retirement

h

return in retirement

f

inflation

n

years to retirement

m

years of retirement income

W₁

first withdrawal, taken at the start of each retirement year

Worked example

1. Growth over 30 years: 50,000 × 1.06^30 = 287,174.56; 10,000 a year grows to 10,000 × (1.06^30 − 1)/0.06 = 790,581.86; total $1,077,756.42.
2. The 30,000 a year you need from savings becomes 30,000 × 1.025^30 = $62,927.03 in the first year of retirement.
3. Funding 25 inflation-linked withdrawals at a 4% return needs $1,328,752.83, leaving a shortfall of $250,996.40.
4. Closing it needs 250,996.40 × 0.06 ÷ (1.06^30 − 1) = $3,174.83 more saving a year.

On this plan savings reach about $1.08 million but $1.33 million is needed, so the money runs out at about age 84 unless you save $3,174.83 more a year.

What the result means

A shortfall means the plan does not fund the income until the age you chose. Close it by saving more, retiring later, spending less or planning on other income. Try a lower return as well: the result is very sensitive to it.

Assumptions and limits

• Returns and inflation are constant every year.
• Savings are added at the end of each year before retirement; withdrawals are taken at the start of each year in retirement.
• Income figures are before tax; taxes on withdrawals are not modelled.
• Real returns vary from year to year, and a bad sequence early in retirement can deplete savings sooner than an average suggests.
• Pension and social security amounts are your own estimates; no benefit rules are built in.