Retirement Income Calculator

This retirement income calculator estimates how much monthly income your savings can provide, so you can see whether your plan covers the lifestyle you want. It grows your savings until retirement, then works out a first-year withdrawal that rises with inflation every year and runs the balance down to zero at the age you choose. Add Social Security or a pension to see your total monthly income.

How to use this tool

1. Enter your age, the age you plan to retire and how long the money needs to last.
2. Enter what you have saved and what you add each month.
3. Set the expected return before and during retirement, and inflation.
4. Add the Social Security or pension income you expect in the first year of retirement.

Formula

W = B × (r − g) ÷ ((1 + r) × (1 − ((1 + g) ÷ (1 + r))^N))

Before retirement, the entered annual rate compounds monthly. B is the balance at retirement, r the yearly return during retirement, g inflation and N the number of retirement years. W is the first withdrawal, taken at the start of the year; each later one is g higher. When r equals g the formula becomes W = B ÷ N.

Example

A 45-year-old with $150,000 saved who adds $800 a month at 6% would have about $996,650 at 67. Drawing that down to zero by 95 at 4.5% a year, with withdrawals rising 2.5% a year, gives a first-year withdrawal of $45,646 — $3,803.85 a month, an initial rate of 4.58%. Adding $2,000 a month from Social Security, total income starts at $5,803.85 a month, about $3,371 in today's dollars.