Retirement Calculator — Step-by-Step Solutions
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
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.
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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