Why You Need a Retirement Plan Right Now
Retirement might seem decades away, but every year you wait to start saving costs you real money. The math is simple and unforgiving: someone who starts saving at 25 will have roughly twice as much money at 65 as someone who starts at 35, even if they contribute the exact same monthly amount. That is the raw power of compound interest, and it only works if you give it time.
The uncomfortable truth is that Social Security alone will not be enough. The average Social Security benefit in the United States is about $1,900 per month in 2025. That is roughly $22,800 per year, which is below the poverty line for most areas of the country. If you want to maintain anything close to your current lifestyle in retirement, you need personal savings and investments working alongside whatever government benefits you may receive.
Our Retirement Savings Calculator gives you a clear picture of where you are headed based on your current savings rate. Whether the number looks great or terrifying, knowing it puts you in a position to take action.
How to Use This Retirement Calculator
Each field is straightforward, and the whole calculation takes about 30 seconds:
Your Current Age is your age right now. This determines how many years of growth your money has ahead of it. The younger you are, the more time compound interest has to work.
Desired Retirement Age is when you want to stop working. The traditional retirement age is 65, but many people aim for 60 or even 55 with the right savings plan. Others plan to work until 67 or 70 to maximize Social Security benefits. Enter whatever age makes sense for your goals.
Current Retirement Savings is the total amount you have saved for retirement right now. Include your 401(k), IRA, Roth IRA, and any other dedicated retirement accounts. If you are just starting and have nothing saved, enter zero.
Monthly Contribution is how much you plan to save each month going forward. Include your personal contribution plus any employer match. For example, if you contribute $300 per month and your employer matches $150, enter $450. That employer match is free money, and leaving it on the table is one of the biggest mistakes workers make.
Expected Annual Return is the yearly growth rate you anticipate. A diversified portfolio of stocks and bonds has historically returned 6 to 8 percent after inflation over long periods. Use 7 percent for a balanced estimate, or 5 to 6 percent if you want to be conservative.
Expected Retirement Length is how many years you expect to be in retirement. If you retire at 65 and plan for living until 90, enter 25 years. It is better to overestimate here — you do not want to outlive your money. Many financial planners recommend planning for 25 to 30 years of retirement.
Understanding Your Results
The Projected Retirement Fund is the total amount your savings will grow to by your retirement age. This is the single most important number in your retirement planning. Total Contributions shows how much of that came from your own deposits. Total Investment Growth reveals how much came from compound returns — this is money your money earned for you while you were busy living your life.
The Estimated Monthly Retirement Income tells you how much you could withdraw each month during retirement, assuming your savings continue to earn returns even after you retire. This figure uses an annuity-style calculation that depletes your fund evenly over your expected retirement length. The Annual Retirement Income is simply twelve times the monthly figure.
Here is a concrete example. A 30-year-old with $25,000 saved who contributes $500 per month at a 7 percent annual return will have approximately $1,050,000 by age 65. That million-dollar fund could provide roughly $7,400 per month over a 25-year retirement. Add Social Security on top of that, and you are looking at a comfortable retirement.
How Much Do You Actually Need to Retire?
The standard rule of thumb is that you need 25 times your annual expenses saved for retirement. This is based on the "4 percent rule," which states that withdrawing 4 percent of your savings each year gives you a high probability of your money lasting 30 years. If you spend $50,000 per year, you need $1,250,000. If you spend $80,000, you need $2,000,000.
Another approach is to aim for 70 to 80 percent of your pre-retirement income. If you earn $75,000 per year, you would want $52,500 to $60,000 per year in retirement income from all sources, including Social Security, pensions, and personal savings.
Neither rule is perfect, but both give you a useful starting target. Use our calculator to see if you are on track, and adjust your contributions until the numbers work. Even small increases in your monthly savings can make a huge difference over 20 or 30 years.
Retirement Savings by Age: Where Do You Stand?
While everyone's situation is unique, here are widely cited benchmarks for retirement savings by age. By age 30, aim to have one times your annual salary saved. By 40, three times your salary. By 50, six times your salary. By 60, eight times your salary. And by 67, ten times your salary. These benchmarks assume you want to maintain your current lifestyle in retirement.
If you are behind, do not panic. Increasing your savings rate by even 1 or 2 percent of your income each year can get you back on track. Take advantage of catch-up contributions if you are over 50 — you can contribute an extra $7,500 per year to your 401(k) and an extra $1,000 to your IRA above the standard limits.
For a comprehensive look at how to figure out your personal retirement number and strategies to get there, read our in-depth guide on how much money you need to retire comfortably.