Retirement Calculator

Retirement calculator: How we got here

Our free calculator predicts your retirement nest egg, and then estimates how it would stretch over your retirement in today’s dollars, taking inflation into account. Our default assumptions include:

• A 3% average annual inflation rate.

• Salary increases of 2% per year.

• A 5% rate of return in retirement (assuming a more conservative portfolio).

Using this retirement calculator

• First, enter your current age, income, savings balance and how much you save toward retirement each month. That’s enough to get a snapshot of where you stand.

• Want to customize your results? Expanding the Optional settings lets you add what you expect to receive from Social Security (get an estimate here), adjust your spending level in retirement, change your expected retirement age and more.

• Hover over or tap on the color bars in your results panel to get further insight into where you stand.

• You can adjust your inputs to see how various actions, like saving more or planning to retire later, might affect your retirement picture.

Want to boost your score? Here's how

Here are some ways to boost your retirement readiness — whether you’re behind on your goals or are on track but maybe want to retire a little earlier.

"My score needs attention."

An individual retirement account is one of the most popular ways to save for retirement given its large tax advantages. You can put in up to $6,500 a year. And if you're 50 or older, you can contribute an additional $1,000 a year.

» Learn more about IRAs

"On my way, but I could close the gap."

The annual limit for 401(k) contributions is $22,500 in 2023 (or $30,000 for those 50 or older). It’s wise to at least contribute up to the point where you’re getting all of the matching dollars your employer might offer.

» See about increasing your 401(k) contributions

"I'm on track, but I want to do more."

A good advisor can help you understand complex issues, diagnose potential problems and take steps to plan for the future. And they’re not as expensive as you might think.

» Learn how to choose a financial advisor

How much money do you need to retire?

A common guideline is that you should aim to replace 70% of your annual pre-retirement income. This is what the calculator uses as a default. You can replace your pre-retirement income using a combination of savings, investments, Social Security and any other income sources (part-time work, a pension, rental income, etc.). The Social Security Administration website has a number of calculators to help you estimate your benefits.

It's important to consider how your expenses will change in retirement. Some, like health care and travel, are likely to increase. But many recurring expenditures could go down: You no longer need to dedicate a portion of your income to saving for retirement. You may have paid off your mortgage and other loans. And your taxes are likely to be lower — payroll taxes, which are taken out of each paycheck, will be eliminated completely.

Be sure to adjust based on your retirement plans. If you know you won’t have a mortgage, for instance, maybe you plan to replace only 60%. If you want to travel every year, you might aim to replace 100% or even 110% of pre-retirement income.

Inflation and retirement

When trying to calculate how much you need to retire, it's also essential to factor in inflation. Prices increase over time, and that decreases the purchasing power (value) of your money. This means the amount you have saved today likely won't go as far 20 to 30 years from now.

We created this retirement calculator with inflation in mind. It includes an assumed 3% average annual inflation rate, so you have a clearer picture of how much you need to save.

Key investing and retirement definitions

401(k): This is a plan for retirement savings that companies offer employees. A 401(k) plan gives employees a tax break on money they contribute. Contributions are automatically withdrawn from employee paychecks and invested in funds of the employee’s choosing (from a list of available offerings).

Compound interest: The interest you earn on both your original deposit and on the interest that original deposit earns. For example, a $1,000 investment earning 6% compounded annually could become roughly $4,300 in 25 years.

Contribution limits: The IRS puts limits on the amount of money that can be contributed to 401(k)s and IRAs each year. These limits sometimes change from year to year.

Financial advisor: A financial advisor offers consumers help with managing money. Financial advisors can advise clients on making investments, saving for retirement, and monitoring spending, among other things. A financial advisor can be a professional, or a digital investment management service called a robo-advisor.

IRA: An individual retirement account is a tax-advantaged investment account individuals use for retirement savings. IRAs are available in two main types: a traditional IRA and a Roth IRA. Learn about the differences between a traditional and a Roth IRA.

Income: The money you get from working, investing, or providing goods or services. Inflation: This happens when the price of goods and services increases as time passes. The result is a decrease in purchasing power, or the value of money.

Nest egg: A sum of money you have set aside for the future — in this case, retirement.

Retirement age: The age you retire depends on you. Full Social Security benefits currently begin at age 66, but will rise to 67 for people born in 1960 and later. Early retirement benefits are available at 62, but at a lower monthly amount.

Returns: The money you earn or lose on an investment.

Risk: The possibility that an investment will perform poorly or even cause you to lose money. In general, a low-risk investment will deliver lower potential returns. The more risk you’re willing to take on, the more potential upside there is — and the higher the likelihood that you could lose your investment. Short-term investment: This is is an investment that can be easily converted to cash — think a money market account or a high-interest savings account versus stocks or bonds. Tax-advantaged: When you get tax benefits from an investment account. For example, you can make 401(k) contributions from your paycheck before tax is taken out. You don’t pay taxes on those contributions or the earnings until you withdraw the money. In other accounts, such as Roth IRAs, you can pay taxes on your contributions up front, then withdraw your money tax-free in retirement.

More retirement resources