Retirement Calculator
Project your retirement savings balance and monthly income. Model your accumulation phase through withdrawals to age 95.
🌅
Enter your details and click Project Retirement
Project your retirement savings balance and monthly income. Model your accumulation phase through withdrawals to age 95.
Planning for retirement is fundamentally an exercise in projecting an uncertain future: you do not know precisely how long you will live, what investment returns will be, how inflation will evolve, or what healthcare will cost. Despite this uncertainty, building a retirement projection model is essential — it gives you a framework for decision-making, reveals whether your current savings rate is sufficient, and identifies how sensitive your outcome is to key assumptions. The Retirement Calculator on Digital.Finance brings together your current savings, contribution rate, expected returns, planned retirement date, and income needs to produce a comprehensive projection and help you identify whether you are on track or need to adjust your approach.
The calculator models two phases: the accumulation phase (your working years) and the distribution phase (retirement). During accumulation, it projects your portfolio value at retirement using compound growth applied to both your current balance and ongoing contributions. During distribution, it applies a withdrawal rate to your projected balance and models how long the portfolio sustains your desired annual income, accounting for inflation adjustments and ongoing investment returns on the remaining balance. If you are 40 years old with $180,000 saved, contributing $15,000 annually, earning an average 7% return, and planning to retire at 65 needing $70,000 per year in today's dollars, the calculator projects a retirement portfolio of approximately $1.8 million — sufficient to support inflation-adjusted $70,000 withdrawals for roughly 30 years under moderate market assumptions.
The 4% rule provides the bridge between your accumulation target and your annual income need. Research originating with the Trinity Study in 1998 found that a portfolio of 50% stocks and 50% bonds could sustain 4% annual withdrawals (adjusted for inflation each year) with high success rates across historical 30-year periods. Multiply your expected annual expenses by 25 to get the portfolio size that would support them at a 4% withdrawal rate. A household expecting to spend $80,000 per year needs $2,000,000. For retirement horizons longer than 30 years — which is increasingly common as life expectancies lengthen — a withdrawal rate of 3.3% to 3.5% provides meaningfully better odds of portfolio survival. Stress-testing your plan at 3.5% is prudent for anyone retiring before age 62.
Social Security benefits reduce the portfolio size you need to fund retirement, since they provide a guaranteed income stream that partially covers annual expenses. The break-even age for delaying Social Security from 62 to 70 is approximately 12 years — if you live past age 82, delaying to 70 typically provides more lifetime income. Each year you delay claiming between age 62 and 70 increases your benefit by approximately 5% to 8%. The optimal claiming strategy depends on your health, life expectancy, marital status, and financial need. For two-income households, coordinating claiming strategies between spouses can meaningfully increase lifetime household Social Security income. Your estimated Social Security benefit is available through the Social Security Administration's online portal and should be incorporated into any retirement projection as a fixed income offset against portfolio withdrawals.
Healthcare is consistently the most underestimated expense in retirement planning. Fidelity's research estimates that a 65-year-old couple retiring today will need approximately $315,000 to cover out-of-pocket healthcare costs in retirement, not including long-term care. For retirees under 65 who must purchase private coverage before Medicare eligibility, premiums can easily exceed $12,000 to $18,000 per year for a couple. Long-term care — assisted living, memory care, or in-home nursing — carries a median annual cost exceeding $50,000 to $100,000 depending on level and location. Integrating realistic healthcare cost assumptions into your retirement budget, rather than approximating with a generic expense multiplier, significantly improves the accuracy of your retirement projection.
Conventional wisdom has long suggested reducing equity exposure as you approach retirement, shifting from a stock-heavy portfolio to a more bond-heavy mix to reduce volatility. The traditional rule of thumb — hold a percentage in bonds equal to your age — has been widely questioned in an era of low bond yields and longer retirement horizons. Many financial planners now advocate for maintaining a higher equity allocation (50% to 70% stocks) well into retirement to support the 20- to 30-year growth need of the portfolio, using a bucket strategy to hold two to three years of living expenses in cash or short-term bonds as a buffer against sequence-of-returns risk. The right allocation balances your need for growth to sustain a long retirement against your psychological tolerance for portfolio volatility.
Being behind on retirement savings is common and addressable, particularly if you identify the gap while you still have working years remaining. The most impactful levers are increasing your savings rate, working longer (even a few additional years can dramatically improve outcomes due to both additional accumulation and fewer years of distribution), reducing planned retirement spending, optimizing investment returns through fee reduction and appropriate asset allocation, and maximizing tax-advantaged accounts. A financial planner can help prioritize these options for your specific situation.
Taxes in retirement depend on the composition of your income sources. Traditional 401(k) and IRA withdrawals are taxed as ordinary income. Roth withdrawals are tax-free. Long-term capital gains from taxable brokerage accounts are taxed at preferential rates — 0% for income below roughly $47,025 for single filers in 2024. Social Security benefits are partially taxable for recipients with income above certain thresholds. Strategic planning around which accounts to draw from and in what sequence can significantly reduce lifetime tax liability in retirement. This is an area where working with a tax-aware financial planner often produces meaningful results.
Financial planners generally advise against relying on an inheritance as a meaningful component of retirement planning. Life expectancy has increased substantially, meaning parents' assets may be needed to fund their own extended care before passing to heirs. Long-term care costs can deplete estate assets rapidly. Inheritance expectations can also create perverse incentives to undersave. An inheritance received is a financial bonus; planning as if it will not materialize keeps your retirement plan self-sufficient and removes risk from factors outside your control.
Inflation affects retirement planning in two ways: it inflates the cost of living during your working years, increasing the nominal savings you need to reach your target, and it erodes the purchasing power of withdrawals during retirement. The most straightforward approach is to work in real (inflation-adjusted) dollars throughout your projection — using a real return rate of approximately 4% to 5% for equities (nominal return minus inflation) and expressing all income needs in today's purchasing power. This approach cleanly separates the investment return question from the inflation assumption and makes the projection easier to interpret.