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.
The calculator assumes that you are withdrawing 4% a year (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.
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?
|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.