# Free online retirement calculator

> This calculator projects how big your nest egg will be at retirement, given what you save each year and your expected return, then shows the safe yearly income it can support.

Project your retirement nest egg with inflation adjustment and the 4% safe withdrawal rate. Shows nominal and real portfolio value, annual and monthly income, and a year-by-year schedule.

**Interactive version:** https://onlinecalculator.me/finance/retirement/
**Category:** Finance

## How to use

1. Enter your current age and target retirement age.
2. Enter your current savings and monthly contribution.
3. Set annual return and inflation rates.
4. Read nominal and real portfolio value, annual income, and monthly income.
5. Press "Show year-by-year" for the full growth table.

## The math

**Month-by-month simulation:**
```
balance = (balance × (1 + monthly_rate)) + monthly_contribution
```

**Inflation-adjusted (real) value:**
```
real_value = nominal_value / (1 + inflation_rate)^years
```

**Annual income (4% rule):**
```
income = portfolio × 0.04
```

## Worked example

Age 30, retiring at 65. Current savings: $25,000. Monthly contribution: $500. 7% return, 2.5% inflation.

- Years: 35
- Monthly rate: 7% / 12 ≈ 0.583%
- Portfolio at 65 (nominal): ≈ **$1,090,000**
- Real (today's dollars): ≈ **$441,000**
- Annual income (4% rule, nominal): ≈ **$43,600/year**
- Monthly income: ≈ **$3,633/month**

## Notes

- **Why 4%?** — Bengen studied U.S. stock/bond returns from 1926–1976 and found that 4% of the starting portfolio, adjusted for inflation each year, survived every 30-year rolling window, even ones starting in 1929 and 1966. The famous "Trinity Study" (1998) confirmed it for 75/25 portfolios.
- **4% isn't a law** — it assumes a 30-year retirement, a roughly 50/50 to 75/25 U.S. stock/bond mix, and no behavioral changes. If you retire early (40s–50s), 3–3.5% is safer. Longer retirement horizons and lower-return environments (post-2020) have pushed some planners toward 3.3%.
- **Nominal vs. real** — "nominal" is the dollar number you'll see on the statement. "Real" is what that money buys in today's groceries. For planning, always use real figures. At 2.5% inflation, $1 today is worth $0.42 in 35 years.
- **Source:** Bengen WP. *Journal of Financial Planning*. 1994:171–180.
- Planning tool only — consult a fiduciary advisor before making retirement decisions based on these numbers.

## Frequently asked questions

### What is the 4% rule?

The 4% rule, introduced by financial planner William Bengen in 1994, states that retirees can withdraw 4% of their portfolio in the first year, then adjust for inflation each year, with a high probability of the portfolio lasting 30 years. The calculator uses this to estimate annual and monthly retirement income.

### What is the difference between nominal and real values?

Nominal is the actual dollar amount at retirement. Real is that amount converted to today's purchasing power — dividing by the cumulative inflation factor. Real values tell you what your money will actually buy.

### What return rate should I use?

7% is a common assumption for a diversified equity portfolio before inflation. After 2.5% inflation, the real return is roughly 4.5%. Use a lower number for a more conservative estimate. The S&P 500 has returned roughly 10% annually before inflation over the past century, but past returns don't guarantee future results.

### How does the simulation work?

The calculator simulates month by month — each month, the balance earns interest, then the monthly contribution is added. At the end of each year, it records the snapshot. This captures compounding accurately regardless of contribution timing.

### Can I model retirement savings with Social Security or pension income?

Not directly. You can add your expected Social Security benefit to the monthly income figure shown, or reduce your monthly contribution by the equivalent amount. A full retirement income plan should include all sources.

## Sources

- [Trinity Study: safe withdrawal rates / the 4% rule](https://en.wikipedia.org/wiki/Trinity_study) — Wikipedia
- [Compound Interest Calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) — U.S. Securities and Exchange Commission

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