Determine the money you’ll need

Calculate your savings

Use this calculator to estimate the savings you’ll need to enjoy the retirement lifestyle you want. Fill in the blanks; then click Submit. Click Reset to try different figures.

Retirement Savings

The calculator assumes that you are withdrawing 4% a year (the 4% rule).

The 4% rule

William Bengen, a certified financial planner, published what has come to be referred to as the 4% rule, which states that if you want your retirement savings to last, you should withdraw no more than 4% of your savings each year. The exact percentage depends on many factors, including how long you live.

Assuming a withdrawal rate of 4%, for every dollar you want to withdraw annually during retirement, you need to have $25 in assets set aside at the time you retire.

An investing example

As an example, the investor wants $80,000 in annual income during retirement. Each year, he’s going to receive $20,000 of that from Social Security. How much does he need in investment assets to make up the difference of $60,000 a year?

The 4% rule

Desired retirement income $80,000
Social Security – $20,000
Investment income needed $60,000
4% withdrawal rate ÷0.04
Total investment assets needed $1,500,000

Everyone’s retirement picture and goals are a little different. Bond rates, fees, and other factors may influence your investment portfolio. Check with your financial advisor to see if the 4% rule or a lower withdrawal percentage (such as 3%) is appropriate for your situation.

Click the Next button to learn about the five common sources of retirement money.