How Much Do I Need to Retire Calculator
A savings target, sometimes called a nest egg, is the amount you would need saved so that a yearly withdrawal covers the spending that other income does not. This works out that target, and how much to save each month to reach it.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
The yearly gap is your spending minus your other yearly income. The target is that gap divided by the withdrawal rate. A 4 percent withdrawal rate is a common starting point for planning, not a promise.
The monthly saving is the amount needed each month so that today's savings, growing at the return you enter, plus the monthly deposits reach the target. It does not adjust for inflation or taxes unless you build them into the spending figure.
Worked example
If you spend $60,000.00 a year and get $18,000.00 from other sources, you need a savings target of $1,050,000.00. Starting with $80,000.00 and earning 5% a year, saving $1,295.52 a month for 25 years gets you there.
Questions
Where does the 4 percent figure come from?
It is a rule of thumb from past market studies. It is a starting point to test, and a smaller or larger rate changes the target a lot.
Should I count Social Security?
Many people do. Enter what you expect to receive each year as other income, using an estimate from your own statement.
Why does the withdrawal rate matter so much?
A lower rate needs a bigger savings target. Try two or three rates to see how the target changes.
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