Calculator
Retirement savings calculator: how much you need and how much to save
Estimate how much you need saved to retire and how much to save each year to get there, with the formulas and a worked example.
Education, not advice. This page explains general rules with invented examples. It isn't financial, tax or legal advice for your situation. Tax figures are for 2026 and come from published IRS, SSA and CMS sources. Rules change, so check current figures before you act.
How much do you need saved to retire? A rough answer takes four numbers: what you'll spend, what guaranteed income you'll have, a withdrawal rate, and how long until you retire. This page walks through the math and a worked example. Then it shows how much to save each year to close the gap.
The formula
- Estimate yearly spending in retirement, in today's dollars. Include taxes and health care.
- Subtract guaranteed income in today's dollars: Social Security, pensions and annuities.
- Divide the gap by a withdrawal rate. That's your savings target in today's dollars. A 3.5% rate means dividing by 0.035, or multiplying by about 28.6.
- Grow your current savings to your retirement date at an assumed return after inflation.
- Work out the yearly saving that covers the shortfall, using the same return.
Using returns after inflation keeps every number in today's dollars, which makes them easier to judge.
The yearly saving in step 5 is:
Here r is the yearly return after inflation and n is the number of years. In words: the shortfall times the return, divided by the growth factor minus one.
A worked example
Aisha is 40 and wants to retire at 65. She expects to spend $80,000 a year in today's dollars. Her Social Security statement estimates $30,000 a year. She has $250,000 saved. She assumes a 4% return after inflation and plans with a 3.5% withdrawal rate.
| Step | Amount |
|---|---|
| Yearly spending | $80,000 |
| Guaranteed income | −$30,000 |
| Gap to cover from savings | $50,000 |
| Savings target ($50,000 ÷ 0.035) | $1,428,571 |
| Today's $250,000 grown 25 years at 4% | $666,459 |
| Shortfall | $762,112 |
| Yearly saving needed for 25 years | $18,300 |
That's about $1,525 a month in today's dollars, rising with inflation. Employer contributions count toward it. In 2026, the 401(k) employee limit is $24,500, and the IRA limit is $7,500.
The 4% return and the 3.5% rate are assumptions for the example, not forecasts.
How sensitive the answer is
Small changes move the target a lot:
| Change | Savings target |
|---|---|
| Withdrawal rate 3% instead of 3.5% | $1,666,667 |
| Withdrawal rate 4% instead of 3.5% | $1,250,000 |
| Spending $70,000 instead of $80,000 | $1,142,857 |
| Social Security $36,000 instead of $30,000 | $1,257,143 |
What a simple calculation leaves out
- Market ups and downs. A steady 4% a year never happens. The order of good and bad years matters most near retirement.
- Taxes by account type. $1,000,000 in a traditional 401(k) buys less spending than $1,000,000 in a Roth.
- Spending that changes. Costs often fall in later retirement, while health care rises.
- Timing of income. Social Security might start years after you retire. A pension might have no inflation adjustment.
- Retiring before 65. You'll need health insurance until Medicare. See retiring before 65.
The app's What if screen answers the same question with your whole plan: when you could retire, and how much you could spend. It runs your actual accounts, taxes and income through many simulated markets, so you see a chance of success rather than one number.
Frequently asked questions
Should I use 4% or a lower withdrawal rate?
A lower rate gives more room for bad markets and a longer retirement. People retiring early, or wanting little chance of cutting spending, often plan with lower rates.
Does this include my home equity?
No. Count it only if you plan to sell or downsize and live on the proceeds.