What is the 4% rule for retirement withdrawals?

The 4% rule, based on the Trinity Study (1998), states that withdrawing 4% of your retirement portfolio in the first year, then adjusting for inflation each subsequent year, provides a high probability (~95%) of your savings lasting 30+ years. For a $1M portfolio, that's $40,000/year ($3,333/month). The rule works for stock/bond portfolios (50/50 or higher equity) and assumes diversified investments. Consider动态 withdrawals (lower in down years) for extra safety.

How much do I need to save for retirement?

A common guideline is to save 15% of gross income (including employer match) throughout your working years. By retirement, aim for 8–12× your final salary saved. For a $100k salary, that's $800k–$1.2M. Another benchmark: save 1× salary by 30, 3× by 40, 6× by 50, 8× by 60. Use the calculator to project your trajectory — if you're behind, increase contributions, delay retirement, or reduce planned withdrawals.

What is a safe withdrawal rate for retirement?

The 4% rule is the standard safe withdrawal rate for 30-year retirements with stock/bond portfolios. For longer retirements (40+ years) or conservative portfolios, consider 3%–3.5%. For shorter retirements (20 years) or aggressive portfolios, 4.5%–5% may work. Never withdraw more than your expected return — withdrawing 8% from a 7%-return portfolio guarantees depletion. Use dynamic withdrawals: reduce spending in down years to preserve principal.

When should I start saving for retirement?

Start as early as possible — ideally in your 20s. Thanks to compound interest, starting at 25 vs 35 can double your final balance. A 25-year-old saving $500/month at 7% retires with ~$1.2M at 65; starting at 35 yields ~$567k — less than half. If you're starting late, max out tax-advantaged accounts (401k, IRA), capture employer match (free money), use catch-up contributions at 50+, and consider delaying retirement by 2–3 years.

How does inflation affect my retirement savings?

Inflation erodes purchasing power over time. At 3% inflation, $1M today is worth only $412k in 30 years. A $50k/year lifestyle today requires ~$121k/year in 30 years just to maintain the same purchasing power. Always plan retirement goals using inflation-adjusted figures. Social Security and some pensions have COLA adjustments, but most investment portfolios don't — you must out-earn inflation to preserve real wealth.

Should I use a 401k, IRA, or taxable brokerage account?

Prioritize: 1) 401k up to employer match (100% immediate return), 2) Max Roth IRA ($7,000 in 2026, $8,000 if 50+), 3) Max 401k ($23,000 in 2026, $30,500 if 50+), 4) HSA if eligible (triple tax advantage), 5) Taxable brokerage. Roth accounts provide tax-free growth and withdrawals — ideal for young savers in lower tax brackets. Traditional accounts provide immediate tax deductions — better for high earners expecting lower retirement income.

What rate of return should I assume for retirement planning?

For a diversified 60/40 stock/bond portfolio, assume 6%–7% nominal (4%–5% real after inflation). For 80/20 or 100% equity, 7%–8% nominal (5%–6% real) is reasonable. Use conservative estimates — planning at 6% and earning 8% is far better than the reverse. Historical S&P 500 average is ~10% nominal, but sequence-of-returns risk (market crashes early in retirement) makes lower estimates safer. Always stress-test at 3% below your base case.

What is sequence-of-returns risk and how do I mitigate it?

Sequence-of-returns risk is the danger of experiencing market losses early in retirement, when you're also withdrawing funds. A 30% decline in year 1 of retirement, combined with 4% withdrawals, can deplete your portfolio decades earlier than the same decline in year 15. Mitigate by: 1) holding 2–3 years of cash/bonds to avoid selling during downturns, 2) using dynamic withdrawals (reduce in down years), 3) maintaining a 60/40 or 70/30 allocation, 4) delaying Social Security to age 70 for guaranteed income floor.

Retirement Calculator

A retirement calculator is a free online tool that projects your retirement savings, monthly retirement income, and inflation-adjusted purchasing power. It shows growth charts, the 4% safe withdrawal rate, and whether you're on track. Free, no sign-up required.

Retirement Profile

Current Age?Your current age in years.

Retirement Age?The age at which you plan to retire.

Current Savings?Your current retirement savings balance.

Monthly Contribution?How much you contribute monthly to retirement savings.

Annual Return Rate?Expected annual investment return rate before retirement.

Withdrawal Rate?Annual percentage of savings you'll withdraw during retirement.

Inflation Rate?Expected annual inflation rate affecting purchasing power.

End of inputs

Your Retirement Projection

Retirement Savings

$2,376,362.19

At age 65

Total Contributions

$470,000.00

Principal + periodic

Total Earnings

$1,906,362.19

80.22% of balance

Monthly Retirement Income

$7,921.21

4.00% rule

Inflation-Adjusted Savings

$844,519.67

Today's dollars

Years to Retirement

30 → 65

Current age: 30. Retirement age: 65 (35 years). Current savings: $50,000.00. Monthly contribution: $1,000.00. Rate: 7.00%. Withdrawal rate: 4.00%. Projected savings: $2,376,362.19 ($844,519.67 real). Monthly income: $7,921.21.

Savings Growth: Contributions vs. Earnings

Nominal vs. Inflation-Adjusted Savings

Key Insights

Inflation at 3.00% over 35 years erodes $1,531,842.52 in purchasing power — your nominal $2,376,362.19 is worth only $844,519.67 in today's dollars. Plan retirement spending using the inflation-adjusted figure.

With 35 years until retirement, compound interest has maximum impact. Each dollar saved now compounds 35 times. Small increases in contributions today have outsized effects later — prioritize saving early over catching up later.

Your monthly contribution of $1,000.00 is solid — aligned with the 15% savings guideline for a $80k–$120k income. Increase by 1% annually or whenever you get a raise to accelerate growth.

Your current savings of $50,000.00 are on track for age 30. To accelerate, increase contributions by 1%–2% annually or whenever you get a raise.

Your 4.00% withdrawal rate aligns with the 4% rule — sustainable for 30+ year retirements based on historical market data. Monthly income: $7,921.21. Consider dynamic withdrawals (lower in down years) for extra safety.

Guide

How to Use This Calculator

1Enter your current age and target retirement age. The years between them determine how long compound interest works for you.
2Input your current retirement savings — include 401k, IRA, and any other retirement accounts.
3Set your monthly contribution. Aim for at least 15% of gross income including employer match.
4Choose an annual return rate. Use 6%–7% for a balanced portfolio; 7%–8% for equity-heavy.
5Adjust the withdrawal rate (4% is the standard safe rate; 3%–3.5% is more conservative).
6Set the inflation rate (2%–3% is typical for the US). This shows your real purchasing power.
7Review the projected retirement savings, monthly income, and inflation-adjusted value.
8Compare the growth chart to see when investment earnings overtake contributions.
9Use the AI insights to identify gaps — increase contributions, delay retirement, or adjust allocations.

Formula

How It's Calculated

Retirement savings projection (future value with contributions):

FV = P × (1 + r/n)^(n×t) + PMT × [((1 + r/n)^(n×t) − 1) / (r/n)]

Where:
- FV   = projected retirement savings (nominal)
- P    = current savings (principal)
- PMT  = monthly contribution (per-period)
- r    = annual return rate (decimal, e.g. 0.07 = 7%)
- n    = compounding periods per year (12 for monthly)
- t    = years to retirement (retirementAge − currentAge)

Monthly retirement income (4% rule):
  annualIncome   = FV × withdrawalRate
  monthlyIncome  = annualIncome / 12

Inflation adjustment (real value in today's dollars):
  realFV = FV / (1 + inflationRate)^t

Example: Age 30, retire at 65, $50k savings, $1,000/month, 7% return, 4% withdrawal, 3% inflation:
- Years to retirement = 35
- Total contributions = $50,000 + ($1,000 × 12 × 35) = $470,000
- Nominal FV ≈ $2,376,362
- Total earnings ≈ $1,906,362 (80% of final balance)
- Monthly retirement income = $2,376,362 × 4% / 12 ≈ $7,921
- Inflation-adjusted FV = $2,376,362 / (1.03)^35 ≈ $844,520 (today's dollars)

Glossary

Key Terms

FAQ

Frequently Asked Questions

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