Retirement Calculator
Calculate how much you need to save for a comfortable retirement
Retirement Planning
Retirement Projection
Retirement Planning Guide
Planning for retirement requires understanding how much you need to save and how your investments will grow over time. The earlier you start, the more time compound interest has to work in your favor.
Key Retirement Planning Principles
Start Early
Time is your greatest asset. Starting at 25 vs. 35 can result in hundreds of thousands more at retirement due to compound growth.
Maximize Employer Match
Always contribute enough to get full employer 401(k) match - it's free money, typically 50-100% return immediately.
The 4% Rule
A common guideline: withdraw 4% of retirement savings annually. $1 million provides $40,000/year. Adjust based on market conditions and life expectancy.
Retirement Account Types
401(k) Plans
Employer-sponsored with pre-tax contributions. 2024 limit: $23,000 ($30,500 if 50+). Employer match is bonus. Tax-deferred growth until withdrawal.
Traditional IRA
Tax-deductible contributions, tax-deferred growth. 2024 limit: $7,000 ($8,000 if 50+). Withdrawals taxed as ordinary income.
Roth IRA
After-tax contributions, tax-free growth and withdrawals. Same limits as Traditional IRA. Best for those expecting higher tax rates in retirement.
Roth 401(k)
Combines high contribution limits of 401(k) with tax-free growth of Roth. Available through some employers.
Common Retirement Mistakes
- Starting Too Late: Delaying 10 years can cost hundreds of thousands in lost compound growth
- Not Maximizing Match: Leaving employer matching on table is declining free money
- Too Conservative Young: Being 50% bonds at 30 severely limits growth potential
- Cashing Out Early: Taking 401(k) distributions before 59½ incurs 10% penalty plus taxes
- Underestimating Needs: Most need 70-90% of pre-retirement income, not 50%
Frequently Asked Questions
How much do I need to retire?
Common rule: 25x your annual expenses (4% withdrawal rule). For $60,000/year, you'd need $1.5 million. Factor in Social Security and pensions.
When should I retire?
Full Social Security: 66-67 depending on birth year. Can claim at 62 with reduced benefits or wait until 70 for maximum benefits.
What return should I expect?
Historically, stock markets return 10% nominal, 7% after inflation. Bonds return 5-6%. Balanced portfolios typically assume 6-8% long-term.