Retirement Calculator
Plan your retirement with 401(k), IRA, and Social Security
Retirement Calculator
Plan your retirement with 401(k), IRA, and Social Security
Your Information
Contributions & Returns
Your Information
Retirement Planning
This calculator helps you plan for retirement with 401(k), IRA, employer matching, and Social Security projections.
Tips
• Start early for compound growth
• Get full employer match
• Increase contributions with raises
• Diversify investments
Understanding Retirement Planning
About Retirement Planning
Plan your retirement with comprehensive calculations for:
- 401(k) accounts
- IRA contributions
- Employer matching
- Social Security benefits
- Withdrawal strategies
- Inflation adjustments
Quick Reference: Retirement Accounts
401(k)
Employer-sponsored retirement plan with potential matching. 2024 limit: $23,000 ($30,500 age 50+)
Traditional IRA
Tax-deferred retirement account. 2024 limit: $7,000 ($8,000 age 50+)
Roth IRA
After-tax contributions, tax-free withdrawals. Same limits as Traditional IRA
Quick Retirement Tips
• Start saving early to maximize compound growth
• Always contribute enough to get full employer match
• Increase contributions with raises
• Diversify investments based on age
• Consider Roth conversions in low-income years
• Plan for healthcare costs in retirement
The 4% Withdrawal Rule
The 4% rule suggests withdrawing 4% of your retirement savings annually (adjusted for inflation) to make your money last 30+ years.
Example: $1,000,000 balance = $40,000/year or $3,333/month
What is Retirement Planning?
Retirement planning is the process of determining retirement income goals and the actions necessary to achieve those goals. It involves identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk.
A comprehensive retirement plan should account for multiple income sources including employer-sponsored plans like 401(k)s, individual retirement accounts (IRAs), Social Security benefits, and personal investments.
Retirement Account Types
401(k) Plans
A 401(k) is an employer-sponsored retirement savings plan that allows employees to contribute pre-tax dollars from their paycheck. Many employers offer matching contributions up to a certain percentage.
- 2024 contribution limit: $23,000 (under 50) or $30,500 (age 50+)
- Tax-deferred growth until withdrawal
- Employer matching is free money
- Early withdrawal penalties before age 59½
Traditional IRA
Individual Retirement Accounts allow you to save for retirement with tax advantages. Traditional IRAs offer tax-deductible contributions and tax-deferred growth.
- 2024 contribution limit: $7,000 (under 50) or $8,000 (age 50+)
- Contributions may be tax-deductible
- Taxes paid on withdrawals in retirement
- Required Minimum Distributions (RMDs) at age 73
Roth IRA
Roth IRAs are funded with after-tax dollars, but qualified withdrawals in retirement are completely tax-free, making them excellent for long-term growth.
- Same contribution limits as Traditional IRA
- No tax deduction for contributions
- Tax-free withdrawals in retirement
- No RMDs during owner's lifetime
- Income limits for eligibility
Employer Matching
Employer matching is when your company contributes to your 401(k) based on your contributions. For example, a 50% match up to 6% of salary means if you earn $60,000 and contribute 6% ($3,600), your employer adds $1,800.
Always contribute at least enough to get the full employer match - it's free money with an immediate 100% return on investment.
The 4% Withdrawal Rule
The 4% rule is a retirement planning guideline that suggests withdrawing 4% of your retirement savings in the first year of retirement, then adjusting that amount for inflation each subsequent year. This strategy aims to make your money last at least 30 years.
Example: With $1,000,000 saved, you could withdraw $40,000 in year one ($3,333/month). If inflation is 3%, you'd withdraw $41,200 in year two, and so on.
Social Security Benefits
Social Security is a federal program that provides retirement income based on your lifetime earnings. The amount you receive depends on your highest 35 years of earnings and the age you start collecting benefits.
- Early retirement (age 62): Reduced benefits, up to 30% less
- Full retirement age (66-67): Full benefits based on your earnings record
- Delayed retirement (up to age 70): Increased benefits, up to 24% more
Visit ssa.gov to get your personalized Social Security statement and benefit estimates.
Inflation and Your Retirement
Inflation erodes purchasing power over time. At 3% annual inflation, what costs $100 today will cost $134 in 10 years and $180 in 20 years. Your retirement plan must account for this by:
- Investing for growth, not just preservation
- Planning for higher expenses in later retirement years
- Adjusting withdrawal amounts annually for inflation
- Considering inflation-protected investments like TIPS
Retirement Planning Strategies
Start Early
Time is your greatest asset in retirement planning. Starting at age 25 vs. 35 can double your retirement savings due to compound interest, even with the same monthly contributions.
Maximize Employer Match
Always contribute enough to receive the full employer match. A 50% match on 6% of salary is an immediate 50% return - you won't find that anywhere else.
Increase Contributions with Raises
When you get a raise, increase your retirement contributions by at least half the raise amount. You'll still take home more money while significantly boosting your retirement savings.
Diversify Investments
Don't put all your eggs in one basket. A well-diversified portfolio across stocks, bonds, and other assets reduces risk while maintaining growth potential.
Consider Tax Diversification
Having a mix of traditional (pre-tax) and Roth (after-tax) retirement accounts gives you flexibility in retirement to manage your tax burden.
Common Retirement Planning Mistakes
- Starting too late: Delaying retirement savings significantly reduces your final balance
- Not maximizing employer match: Leaving free money on the table
- Underestimating retirement needs: Many retirees need 70-80% of pre-retirement income
- Ignoring inflation: Your money needs to grow to maintain purchasing power
- Taking early withdrawals: Penalties and lost compound growth can be devastating
- Forgetting healthcare costs: Medicare doesn't cover everything; plan for supplemental insurance
- Poor investment allocation: Too conservative or aggressive for your age and risk tolerance
Additional Retirement Considerations
Healthcare Costs
Healthcare is often one of the largest retirement expenses. Plan for Medicare premiums, supplemental insurance, prescription drugs, and out-of-pocket costs. Consider a Health Savings Account (HSA) if eligible.
Long-Term Care
About 70% of people over 65 will need long-term care at some point. Long-term care insurance or dedicated savings can protect your retirement nest egg from being depleted by care costs.
Estate Planning
Consider beneficiary designations, wills, trusts, and powers of attorney. Proper estate planning ensures your assets are distributed according to your wishes and can minimize tax burdens on heirs.
Required Minimum Distributions (RMDs)
Starting at age 73, you must take RMDs from traditional IRAs and 401(k)s. Failing to take RMDs results in a 25% penalty on the amount not withdrawn. Plan ahead to avoid unexpected tax bills.
Take Action Today
The best time to start planning for retirement was yesterday. The second best time is today. Even small steps can make a significant difference:
- Calculate your retirement needs using this calculator
- Review your current retirement account contributions
- Increase contributions by at least 1% of your salary
- Ensure you're getting full employer match
- Schedule an annual retirement plan review
- Consider consulting a financial advisor for personalized advice
Disclaimer: This calculator provides estimates based on the information you provide. It is not financial advice. Consult with a qualified financial advisor for personalized retirement planning guidance.