Retirement Calculator
Estimate the retirement corpus you need and whether your monthly savings will get you there, accounting for inflation and post-retirement returns.
How this retirement calculator works
It answers two questions and compares them. First, what will you have: your current
savings compound monthly at the expected return, and every future monthly contribution compounds for the
months it stays invested (annuity-due — contributions at the start of each month):
Corpus = S × (1 + i)n + M × ((1 + i)n − 1) ÷ i × (1 + i)
where S is current savings, M the monthly saving, i the
monthly return and n the months until retirement. Second, what will you need:
your current annual expenses are inflated to retirement age, then multiplied by 25 — the classic
4% rule, which assumes a portfolio of 25 × annual expenses can sustain inflation-adjusted
withdrawals for a roughly 30-year retirement.
Worked example
Age 30, retiring at 60, with 50,000 saved,
saving 1,000 per month, expecting 10% returns and 6%
inflation, spending 3,000 per month today. Over 360 months, (1 + 0.10/12)360 ≈ 19.84:
the 50,000 grows to ≈ 992,000 and the contributions to ≈ 2,279,000 — a corpus of about 3.27 million.
But 3,000 of monthly expenses becomes ≈ 17,230 at 6% inflation, so annual spending is ≈ 206,800 and the
corpus needed is 25 × that ≈ 5.17 million — a shortfall of roughly 1.9 million.
Raising the monthly saving to about 1,850 closes the gap.
Assumptions and limits
- The 4% rule is a historical guideline for ~30-year retirements; retiring very early or in low-return environments may warrant 28–33 × expenses instead.
- Returns are assumed steady; real portfolios fluctuate, and the years just before retirement matter most.
- Pensions, social security or rental income are not modelled — subtract such income from your monthly expenses first.
- All figures are pre-tax.
Frequently asked questions
How much money do I need to retire?
A widely used rule of thumb is 25 × your annual expenses at retirement (the "4% rule"): a portfolio of that size has historically supported withdrawing 4% in the first year, adjusted for inflation thereafter, for a 30-year retirement. This calculator inflates your current expenses to your retirement age and multiplies by 25.
What is the 4% rule?
From the Trinity study of historical US market returns: retirees who withdrew 4% of a stock/bond portfolio in year one, then adjusted that amount for inflation annually, rarely ran out of money over 30 years. It is a planning guideline, not a guarantee — sequence-of-returns risk, longer retirements and different markets can require a lower rate (3–3.5%).
Why does the calculator ask for inflation?
Because your expenses will not stay at today's level. At 6% inflation, monthly expenses of 3,000 today become about 17,230 in 30 years — a corpus sized for today's costs would run out quickly. The corpus needed is based on inflated expenses.
What return should I assume before retirement?
Use a blended, net-of-fees figure for your actual portfolio: long-run equity averages of 10–12% only apply to a mostly-equity portfolio, while a mix with bonds and deposits is more like 7–9%. Being conservative here means being pleasantly surprised rather than short.
What if the calculator shows a shortfall?
You have four levers: save more each month, retire a few years later (which both grows the corpus and shrinks the retirement it must fund), earn a higher return by adjusting asset allocation, or plan for lower expenses. Small monthly increases early on have outsized effects thanks to compounding.
Does this account for a pension or social security?
No — it assumes the corpus funds all expenses. If you expect a pension, subtract the pension income from your monthly expenses before entering them; the corpus then only needs to cover the gap.