Retirement Planning Calculator - How Much to Save and Withdraw in Retirement

How Much Do You Need to Retire?

Let’s say you:

• Your age now: 35
• Your planned retirement age: 68
• Your life expectancy: 85
• Your retirement savings today: $50,000
• Average investment return: 6%
• Inflation rate (annual): 3%
• Annual Gross Income ($): $70000
• Your current income increase: 3%/year
• Income needed after retirement: 85% of current income

You will need about $2,106,214.35 at age 68 to retire.

Based on your current plan, you will have about $342,029.49 at age 68, which is less than what you need for retirement. To save $2,106,214.35 at 68, you can either save $1,470.27 per month or save $18,123.36 per year or save 18.05237% of your income every year.

If I Need $5,000 Monthly in Retirement, How Much Should I Save Now?

Let’s say you:

• Your age now: 35
• Your planned retirement age: 68
• Your life expectancy: 85
• Your retirement savings today: $50,000
• Average investment return: 6%
• Inflation rate (annual): 3%
• Annual Gross Income ($): $80000
• Your current income increase: 3%/year

Based on the assumption that retirement is 33 years away, due to an annual inflation rate of 3%, $5,000 then is equivalent to $1885.13 today (according to the Inflation Calculator). Therefore, enter $22,621.56 as the Target Retirement Income Replacement and select $/year (today's money).

According to your current plan, to have an annual income of $60,000 after retirement, you should save $382.32 each month, or $4,712.62 per year, which is about 4.10739% of your annual income. By age 68, you are projected to have approximately $800,770.66 saved.

If you withdraw a amount adjusted for 3% inflation annually, you can start by withdrawing $5,000 per month at retirement.

Alternatively, if you withdraw a fixed monthly amount without inflation adjustment, you can withdraw $6,200.40 per month from age 68 to 85.

References

Government Resources:

• Retirement.gov - Official retirement planning website
• Ballpark Estimate Worksheet - Department of Labor planning tool
• Treasury I Bonds - Inflation-protected government securities

Educational Resources:

• Investor.gov - SEC investor education
• FINRA Investor Education - Investment industry educational resources
• AARP Retirement Planning - Resources for people 50+