Retirement Calculator
We created this tool to help you visualize what your finances might look like once you retire and how much you should save now to get the retirement you want.
To use the retirement calculator, enter the values manually or move the sliders from left to right to change amounts.
Default Income Replacement Rate
Although everyone is different, as a general rule, most people require about 80% of their preretirement income to maintain their current lifestyle during retirement. That means if you make $50,000 a year right before retirement, you’ll probably need about $40,000 a year during retirement. Most people’s required retirement income is lower because they’re no longer paying the costs of working (gas prices, dry cleaning, etc.), tax bills are usually lower, mortgages may be paid for, and children likely no longer require financial support.
How to Estimate your Social Security Benefits
You can get an individual benefit estimate based on your current earnings from the Social Security Quick Calculator at Social Security Online. Please note that the benefit estimates made by the Quick Calculator are rough and may not match those provided by your Social Security Statement.
Average Rate of Return
Returns vary greatly depending on asset allocation and other factors. A portfolio fully invested in US stocks from 1926 to 2016 grew an average of 9.9% per year, while a portfolio of 10-year US government bonds grew approximately 5.2%. Past performance is no guarantee of future returns.
Consult a Tax Expert for Tax Advice
This calculator does not provide legal or tax advice. How taxes may affect your retirement income is not included in this tool. After-tax returns may vary depending on your personal tax situation.
Results derived from our Retirement Planning Calculator are hypothetical and should only be used for educational purposes. Investing in securities involves the risk of loss. The calculator may be useful for illustrating potential retirement income and how specific decisions could affect your results, but it should not be the basis for investment decisions.
When using this calculator, keep in mind:
- The calculator assumes your retirement account will be depleted at the age you enter. Your lifespan may be longer or shorter than the benchmark in the calculator. If you plan to leave an inheritance, you will need to save more than the amount suggested by the calculator.
- How inflation affects you cannot be fully accounted for in your estimate. Your living expenses in retirement may be significantly higher than they are today, especially if your retirement begins 20 or 30 years in the future.
The Retirement Planning Calculator uses a core set of assumptions to simulate hypothetical retirement income scenarios. These assumptions may differ from actual events. This tool is only meant to provide a general guideline for planning purposes. With each use, your results may vary, especially as your finances change.
To calculate the income needed each month during retirement, we take your current monthly income, add 3% annual inflation until your retirement age, then multiply the result by the percentage of income you expect to need in retirement. We then adjust the result to today’s dollars.
Based on inputs for current savings, how much you plan to save each year, and your projected Social Security benefits, we can determine how much a hypothetical user may have saved by the time they retire. We then assume a 4% annual withdrawal from your initial savings. The result is then adjusted for inflation at 3% annually, giving you your expected monthly income.
Although the calculator’s results are hypothetical, what you see may prompt you to ask:
Do your current assets put you on track to reach your retirement goals?
Are you counting on an above-average rate of return to reach your goals?
How many years will you need to continue working and saving before you can begin taking withdrawals?
Are you contributing enough to your investment accounts?
Will your assets survive throughout your retirement?
Contact Us
One of our 401(k) business specialists would love to talk to you about your company’s retirement plan needs.
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(888) 674-4504
