How Much Do You Need to Retire?

This retirement calculator uses the 4% safe withdrawal rule and compound interest projection to determine your retirement nest egg target and whether current savings and contributions are sufficient. The target nest egg = (Desired Monthly Income × 12 × Inflation Adjustment) ÷ 0.04. The 4% rule suggests withdrawing no more than 4% of your portfolio annually to ensure it lasts 30+ years.

Inflation and Its Impact on Retirement Planning

Inflation is the silent destroyer of retirement planning. $5,000/month today becomes equivalent to $8,100+/month in 30 years at 3% annual inflation. This is why our calculator adjusts your target income for inflation before computing the nest egg requirement. Always plan for inflation-adjusted needs, not today's dollars — the difference over 30 years is enormous.

Sequence-of-Returns Risk

The biggest threat to retirement security isn't low average returns — it's poor returns in the early retirement years. Withdrawing from a declining portfolio accelerates depletion. Mitigation strategies: maintain 2–3 years of expenses in cash/bonds to avoid selling equities during downturns, use a dynamic withdrawal strategy (reduce withdrawals in down markets), delay Social Security to maximize guaranteed income, and consider annuities for baseline income certainty.

The Power of Catching Up

IRS catch-up contributions allow those 50+ to contribute an extra $7,500/year to 401(k) and $1,000/year to IRA in 2024. For a 50-year-old in the 24% tax bracket, maxing a 401(k) saves $7,320 in federal taxes while adding $23,000 to retirement savings. 15 years of maximum 401(k) contributions at 8% return adds approximately $630,000 to a retirement portfolio.