Retirement Calculator — Step-by-Step Solutions
The Retirement Calculator helps you plan for retirement using widely recognised rules of thumb including the 25x annual expenses rule and the 4% withdrawal rate. It projects your savings growth, accounts for inflation, and identifies any shortfall in your current savings trajectory.
Four modes cover essential retirement questions: how much you need to retire (25x rule), when you can retire based on current savings and contributions, monthly income in retirement (4% rule), and a savings gap analysis that shows how much extra you need to save each month to reach your goal.
For educational purposes only. Not financial advice. The 4% rule and 25x rule are general guidelines and may not suit all situations. Consult a qualified financial adviser for personalised advice.
Your calculations will appear here
How to Use the Retirement Calculator
- Select a mode: How Much Do I Need, When Can I Retire, Retirement Income, or Savings Gap Analysis.
- For How Much Do I Need, enter your desired annual income. The calculator applies the 25x rule.
- For When Can I Retire, enter all your details for a year-by-year projection.
- For Retirement Income, enter your total savings and withdrawal rate (default 4%).
- For Savings Gap Analysis, the calculator shows your shortfall and extra monthly savings needed.
Formula and Theory
The 4% withdrawal rule suggests retirees can withdraw 4% of their portfolio in year one and adjust for inflation, with a high probability of the portfolio lasting 30 years.
The 25x rule: if you need $X per year, you need 25x that amount saved.
Real returns (after inflation) matter more than nominal returns. 7% nominal with 3% inflation gives ~3.88% real.
The savings gap analysis compares projected savings against inflation-adjusted targets and calculates additional contributions needed.
Worked Examples
Example 1: 25x rule
Problem: $60,000/year retirement income.
Solution: $60,000 x 25 = $1,500,000.
Answer: $1,500,000
Example 2: Retirement income
Problem: $800,000 savings at 4%.
Solution: $800,000 x 0.04 / 12 = $2,666.67/month.
Answer: $2,666.67/month
Example 3: Gap analysis
Problem: Age 40, retire 65, $100k saved, $1k/month, 7%, 3% inflation, want $70k/year.
Solution: Compare projected vs target.
Answer: Gap and additional monthly shown
Frequently Asked Questions
Is the 4% rule reliable?
Other income sources?
What return rate?
Inflation impact?
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