How it works
This projection grows your current savings and monthly contributions at a steady return until retirement, then estimates how much yearly income the balance can support using a withdrawal rate.
The 4% rule comes from research on historical US market returns: withdrawing 4% of the starting balance, adjusted for inflation each year, lasted at least 30 years in most historical periods. Lower rates are more conservative.
Because a dollar in 30 years buys much less than today, the calculator also shows results in today's dollars using your inflation assumption. Compare those figures with your income goal.
Formula
FV = PV(1 + r)^n + PMT × ((1 + r)^n − 1) ÷ r (monthly); real value = FV ÷ (1 + inflation)^years; savings needed = income goal ÷ withdrawal rate
Questions people ask
How much do I need to retire?
A common shortcut is 25 times the yearly income you want from savings (the inverse of a 4% withdrawal rate). Subtract expected Social Security or pension income from your goal first.
What return should I assume?
A diversified stock-and-bond portfolio has historically returned roughly 5–8% a year before inflation. Using a lower number builds in a margin of safety.
Does this include Social Security?
No. Reduce the desired income figure by your estimated Social Security benefit (from your SSA statement) to see what your savings need to cover.