Retirement Calculator — Savings Planner & Income Estimator

The 4% rule (Bengen rule, 1994) states that retirees can withdraw 4% of their portfolio in the first year of retirement and adjust for inflation each subsequent year with a high probability of not running out of money over 30 years. It was based on a 50/50 stocks/bonds portfolio using US market history. Critics note that low bond yields since 2010 make 3-3.5% a more conservative target. The rule is a useful starting point, not a guarantee.

Common benchmarks (Fidelity guidelines): by age 30 → 1× your annual salary saved; age 40 → 3×; age 50 → 6×; age 60 → 8×; retirement (67) → 10×. Example: if you earn $60,000/year, aim for $60,000 saved by 30, $180,000 by 40, $360,000 by 50. These are targets, not hard rules — starting late and contributing more aggressively can close the gap.

The US stock market (S&P 500) has returned about 10% nominally and 7% after inflation over the long term. For a balanced portfolio (70% stocks, 30% bonds), 6-7% nominal is a reasonable expectation. Always run projections with 5%, 7%, and 9% to understand the range of outcomes. Never plan with only optimistic rates — the gap between 5% and 9% over 30 years is massive.

Using the 4% rule: Annual income = Total savings × 0.04. Monthly income = Annual income / 12. Example: $1,000,000 saved → $40,000/year → $3,333/month. For $5,000/month you need $1.5 million. Remember this is before taxes (if savings are in a traditional 401k/IRA) and should be added to Social Security or pension income.

Inflation erodes purchasing power over time. At 3% annual inflation, $3,333/month today is equivalent to only $1,840/month in 20 years in real terms. The 4% withdrawal rule accounts for this by increasing withdrawals with inflation each year. For long retirements (20-30+ years), planning for inflation is critical — conservative planners use 2.5-3% inflation in their models.