Projection includes decumulation phase after age 65 assuming a fixed monthly withdrawal of $4,000.
About this calculator
Overview
Retirement planning is the process of setting retirement income goals and the actions and decisions necessary to achieve those goals. It includes identifying sources of income, estimating expenses, implementing a savings program, and managing assets and risk. Early planning is essential because of the power of compound interest—the 'growth phase' of your strategy relies on time as much as capital.
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Pro Tips
What is the 4% Rule?: The 4% rule is a guideline that suggests you can safely withdraw 4% of your total savings in your first year of retirement, and adjust for inflation thereafter, without running out of money for at least 30 years.
How should I estimate spending?: Financial advisors often suggest aiming for 70-80% of your current income. Consider healthcare, travel, and whether your mortgage will be paid off.
What return rate should I use?: A conservative estimate (4-6%) is safer than aggressive assumptions. The S&P 500 has averaged ~10% historically, but inflation and market cycles vary.
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Fun Facts
"The 'accumulation phase' is when you build wealth; the 'decumulation phase' is when you live off it."
"Starting your retirement journey at age 25 vs age 35 can result in double the final balance with the same monthly contribution."
"Most modern retirement plans forget to account for 'longevity risk'—the risk of outliving your money as life expectancy increases."
