What this calculator tells you
Retirement planning boils down to two questions: how big will my pot be? and what income can that pot safely pay me? The first part is a compound-growth projection of your current savings plus monthly contributions. The second uses the "4% rule" — a rule of thumb from the well-known Trinity study suggesting that withdrawing about 4% of your starting balance each year, adjusted for inflation, has historically lasted through a 30-year retirement.
A worked example
A 30-year-old with $25,000 saved, contributing $500 a month at a 7% average return, would project to roughly $1.05 million by 65. The 4% guideline turns that into about $42,000 of first-year income, or $3,500 a month — before any state pension or social security is added on top.
How to read the result honestly
- It is a projection, not a promise. Markets do not deliver smooth 7% years; they deliver −20% and +30% years that average out. The longer your horizon, the more reasonable an average becomes.
- Inflation matters. $1 million in 35 years buys much less than today. For a today's-money view, use a real return (nominal minus ~2.5% inflation) — around 4–5% instead of 7%.
- The 4% rule is a starting point. Retiring earlier than 60, or retiring into a market crash, argues for 3–3.5%; flexibility to cut spending in bad years argues you can afford more.
Levers that move the needle most
Run the calculator a few times and you will notice a pattern: adding years helps more than adding dollars. Delaying retirement from 60 to 65 often grows the pot by 40–50% because contributions keep flowing in while the largest balance of your life keeps compounding. The second-strongest lever is the contribution rate early in your career — money invested in your 20s and 30s does double or triple duty compared with money invested in your 50s.