How we calculate your retire year

Our calculator uses a small set of plain, widely used formulas. Here's exactly what it does, so you can judge the results for yourself.

1. Your retirement number

Your retirement number is the savings you need so that your withdrawals, together with Social Security, cover your yearly spending:

Retirement number = (yearly income − yearly Social Security) ÷ withdrawal rate

With the default 4% withdrawal rate, that's 25 times the income your savings must provide. The 4% rule comes from research on historical US stock and bond returns. It found that withdrawing 4% in the first year, then adjusting for inflation, generally lasted at least 30 years. For longer retirements, a lower rate is more cautious.

2. The years before Social Security

If you retire before your Social Security starting age, your savings must cover your full income until benefits begin. We add the missing benefit for each of those years to your retirement number. We don't count any investment growth on that money, which keeps the estimate slightly cautious.

3. Growing your savings

We grow your savings month by month and add your monthly contribution (plus any employer match) at the end of each month. Each year, your contribution rises by the yearly increase you enter.

4. Everything in today's dollars

Prices rise over time, so we subtract inflation from your investment return. A 7% return with 3% inflation is a real return of about 3.9% a year. We use the exact formula (1.07 ÷ 1.03 − 1), not a simple subtraction. This keeps every number on the page in today's buying power: $50,000 a year means what $50,000 buys now.

One consequence: if you save the same dollar amount every year, it's worth a little less each year after inflation. That's why the default assumes your savings rise 3% a year, in line with typical pay raises.

5. Your retire year

Each year, we compare your savings with the retirement number for that age. Your retire year is the first year your savings reach it. If that doesn't happen by age 100, we show what would help instead.

What we leave out

• Taxes on withdrawals and investment fees, which both reduce what you can spend
• Market ups and downs: we assume a steady average return every year
• Pensions, part-time income, home equity and inheritances
• Changes to Social Security rules or benefit amounts

Because of this, treat your retire year as a helpful estimate, not a promise. For a plan built around your full situation, consider talking to a fee-only financial planner.

Your privacy

The calculator runs entirely in your browser. We don't store the numbers you enter. They only appear in the page link, so you can share your results if you choose.