Retirement Calculator

By Frank Sterling (pen name of LifeCalc’s founder; not a licensed financial advisor). Figures on this page were computed with the same code the calculator runs. Data verified 2026-09-01.

How this retirement calculator works

There are four steps. First, your salary is grown at your assumed raise rate until retirement, and your target income is that future salary times your income replacement percentage. Second, your savings compound monthly: balance = balance × (1 + return ÷ 12) + monthly contribution, for each month until you retire. Third, the tool compares the result with a target of 25 times your desired annual income (the inverse of the 4% rule) and reports the gap, plus the monthly income a 4% first-year withdrawal would give you. Fourth, it runs a 1,000-trial Monte Carlo simulation to estimate the chance your money lasts 30 years.

In each Monte Carlo trial, every year’s return is your expected return plus a random draw from a normal distribution with a 12% standard deviation. The accumulation years add 12 months of contributions after each year’s growth. Then 30 retirement years withdraw your target income each year. A trial counts as a success only if the balance stays above zero the whole time. The success rate is successes divided by 1,000.

Assumptions and defaults

• Defaults: age 30, retiring at 65, $50,000 saved, $1,000 a month, 7% return, $75,000 salary growing 3% a year, and 80% income replacement.
• All amounts are nominal (future) dollars. The target income rises with your salary growth, but the deterministic drawdown chart withdraws the same nominal amount every year rather than increasing it for inflation.
• The 30-year retirement length and the 12% volatility are fixed and cannot be edited. The same expected return is used before and after retirement.
• Social Security, pensions, part-time income, health care costs, taxes on withdrawals and fees are not modeled. Because Social Security is left out, the 25x target is deliberately a savings-only view.
• The Monte Carlo result uses random numbers, so the percentage moves a few points every time it is recalculated.

Worked example: the defaults

Growing $75,000 at 3% for 35 years gives a salary of about $211,040 at retirement, so 80% replacement means a target of about $168,832 a year, or $14,069 a month. Contributing $1,000 a month for 35 years at 7% turns $50,000 plus $420,000 of new contributions (a total of $470,000 put in) into about $2,376,362, meaning about $1,906,362 of growth.

Notice the tension. A single fixed 7% path with flat nominal withdrawals leaves money at the end of 30 years, yet the 25x check and the simulation both flag a shortfall. Random returns with the same average hurt more than a smooth line, because losses early in retirement are hard to recover from, which is called sequence risk. That is the reason to treat the percentage, not the smooth chart, as the more cautious signal. Also notice how much the target itself moves: a 3% annual raise more than doubles the salary you are replacing.

Limitations: when to talk to a professional

A projection 35 years out is only as good as its guesses. Real inflation, returns, career paths, health care costs and tax law will differ, and Social Security and pensions can shift the picture substantially. Use the results to compare scenarios, such as saving more or retiring later, not to predict a dollar figure. A fee-only fiduciary financial planner can build a plan around Social Security claiming, tax-efficient withdrawals, Medicare and long-term care, and a CPA can help with Roth conversions and required distributions.

Related guides

• How Much Do You Need to Retire at 55?
• Where to Retire on $3,000 a Month
• Compound Interest Explained for Beginners
• 401(k) Contribution Limits 2026: Full Guide
• The Rule of 72: How to Double Your Money