You enter your current age, target retirement age, current savings balance, monthly contribution, and expected annual return. The tool uses the future value formula to compound your savings monthly over the accumulation period: FV = PV × (1+r)^n + PMT × ((1+r)^n − 1) / r. It then applies the 4% rule to the final balance to estimate sustainable monthly retirement income.
A diversified stock/bond portfolio has historically returned 7–10% annually before inflation, or roughly 5–7% after inflation. Many planners use 6–7% as a moderate long-term assumption. More conservative estimates use 4–5%.
The original 4% rule (Bengen, 1994) was designed for a 30-year retirement with a 50/50 stock-bond portfolio. More recent research suggests 3.3–3.5% may be safer with today's lower expected returns. The rule remains a useful starting point but not a guarantee.
Not directly. If you enter a nominal return (e.g., 7%), your nest egg is in future dollars. To estimate in today's purchasing power, subtract expected inflation (2–3%) from your return assumption. A 7% nominal return with 3% inflation is roughly a 4% real return.
If your employer matches contributions, include the total (your contribution plus the match) in the monthly contribution field. A common match is 50% of contributions up to 6% of salary — that's free money you don't want to leave on the table.
This calculator projects your personal savings only. Social Security provides additional income in retirement — you can check your estimated benefit at ssa.gov. Most planners treat Social Security as a supplement, not the primary income source.
The 4% rule is a historical heuristic, not a guarantee — actual safe withdrawal depends on sequence of returns, inflation, taxes, and lifespan. Expected returns aren't promised returns. Not financial advice.