Question 1

How much do I need to save to retire comfortably?

Accepted Answer

A common rule of thumb is to save 25× your expected annual retirement expenses (based on the 4% safe withdrawal rule). If you need $60,000/year in retirement, aim for a $1.5 million nest egg. Our calculator personalises this by accounting for your current age, savings rate, expected return, inflation, and desired retirement income.

Question 2

What is the 4% rule in retirement planning?

Accepted Answer

The 4% rule, from the Trinity Study, suggests you can safely withdraw 4% of your retirement portfolio in the first year, then adjust for inflation each year, with a high probability the money lasts 30+ years. For example, a $1 million portfolio supports ~$40,000/year in withdrawals. It's a guideline, not a guarantee — early retirees and those in low-return environments may need a lower withdrawal rate (3–3.5%).

Question 3

How does inflation affect my retirement savings?

Accepted Answer

Inflation erodes purchasing power over time. At 2.5% annual inflation, $1 million today is worth only $610,000 in purchasing power in 20 years. This is why the calculator shows both nominal and inflation-adjusted retirement balance. It also affects your withdrawal needs — the $4,000/month you need today will require ~$6,500/month in 20 years at 2.5% inflation.

Question 4

What return rate should I use for my retirement portfolio?

Accepted Answer

For the accumulation phase (pre-retirement), a diversified stock/bond portfolio has historically returned 6–8% annually after inflation. For the distribution phase (in retirement), use a more conservative 3–5% to account for sequence-of-returns risk — bad early returns can devastate a portfolio if you're withdrawing simultaneously. Our calculator uses separate rates for each phase.

Question 5

Is it too late to start saving for retirement at 40 or 50?

Accepted Answer

It's never too late. Starting at 40 with $0 saved, contributing $1,500/month at 7% annual return, you'd accumulate ~$850,000 by age 65. At 50 with $50,000 saved and $2,000/month contributions at 7%, you'd reach ~$570,000. Max out catch-up contributions (401k allows extra $7,500/year for those 50+), delay retirement by even 2–3 years, and consider working part-time early in retirement to extend fund longevity.

Retirement Calculator

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Retirement Calculator

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