How to Use This Retirement Calculator
Enter your current age and target retirement age, your current retirement savings balance, your monthly contribution, your employer match amount, your expected annual investment return, expected inflation rate, your current income for Social Security estimation, your planned withdrawal rate in retirement, and your state for retirement income tax treatment. Click Calculate Retirement Plan to see your projected nest egg, inflation-adjusted value, estimated monthly income from savings plus Social Security, year-by-year growth table, and how your savings compare to Fidelity age benchmarks.
How Much Do You Need to Retire?
The most widely used rule of thumb is the 25x rule — you need 25 times your expected annual retirement spending saved before you retire. This is the mathematical inverse of the 4% safe withdrawal rate. If you plan to spend $60,000 per year in retirement you need $1,500,000 saved. If you plan to spend $80,000 per year you need $2,000,000. This rule assumes a 30-year retirement horizon and a diversified portfolio of stocks and bonds — it is based on the Trinity Study which examined historical portfolio survival rates across different market conditions.
Social Security meaningfully reduces the amount you need to save. If you expect $2,000 per month from Social Security that is $24,000 per year in retirement income that does not need to come from your savings. This reduces your required nest egg by $600,000 using the 25x rule. Our calculator automatically estimates your Social Security benefit based on your current income and planned retirement age using the SSA bend point formula — giving you a more complete picture of your total retirement income.
| Age Milestone | Fidelity Benchmark | Target (on $75K salary) |
|---|---|---|
| Age 30 | 1x annual salary | $75,000 |
| Age 35 | 2x annual salary | $150,000 |
| Age 40 | 3x annual salary | $225,000 |
| Age 50 | 6x annual salary | $450,000 |
| Age 60 | 8x annual salary | $600,000 |
| Age 67 | 10x annual salary | $750,000 |
The 4% Rule — How Much Can You Spend Each Year?
The 4% rule states that you can withdraw 4% of your portfolio in the first year of retirement and adjust that amount for inflation each subsequent year with a high probability of the money lasting 30 years. On a $1,000,000 portfolio that is $40,000 in year one — or $3,333 per month. The rule was derived from the Trinity Study which analyzed historical portfolio returns and found that a 50% stock and 50% bond portfolio survived 30 years in 95% of historical scenarios when withdrawals were limited to 4% of the initial value.
Some financial planners now recommend a more conservative 3.5% withdrawal rate given longer life expectancies and lower expected bond returns than historical averages. Others suggest a flexible withdrawal strategy — spending less in down markets and more in up markets — which allows a higher average withdrawal rate over time. Our calculator uses 4% as the default but you can adjust the withdrawal rate to see how different rates affect your monthly income.
Social Security — What to Expect
Social Security benefits are calculated based on your highest 35 years of indexed earnings. The SSA uses bend points to calculate your Primary Insurance Amount — the benefit you receive at full retirement age. For 2025 the full retirement age is 67 for anyone born in 1960 or later. Claiming at 62 permanently reduces your benefit by up to 30%. Delaying past full retirement age increases your benefit by 8% per year up to age 70 — making delayed claiming one of the highest guaranteed returns available to retirees.
The maximum Social Security benefit at full retirement age in 2025 is approximately $4,018 per month. At age 70 the maximum is approximately $5,108 per month. These maximums require 35 years of maximum taxable earnings — most Americans receive significantly less. Our calculator estimates your benefit using the 2025 bend points of $1,226 and $7,391 applied to your current income as a proxy for your career average earnings.
The Power of Employer Match — Free Money
Employer 401(k) matching is the closest thing to free money in personal finance. A common match is 100% of the first 3% of salary — meaning if you earn $75,000 and contribute 3% ($2,250 per year) your employer adds another $2,250 at zero cost to you. This is an immediate 100% return on that portion of your contribution before any investment growth. Over a 30-year career with a 7% return an employer match of $150 per month grows to over $170,000 in additional retirement savings. Never leave an employer match on the table — always contribute at least enough to capture the full match.
State Tax Treatment of Retirement Income
State income taxes on retirement income vary significantly and can meaningfully affect your retirement budget. Nine states have no income tax at all — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire. Four states — Illinois, Mississippi, Pennsylvania, and New Hampshire — do not tax retirement income from 401(k) plans, IRAs, and pensions even though they may tax other income. Many other states provide partial exemptions for retirement income. A retiree moving from California to Florida saves approximately 9.3% in state income tax on retirement withdrawals — a significant amount on large distributions.
Frequently Asked Questions
How much should I save for retirement each month?
The standard recommendation is to save 15% of your gross income for retirement including any employer match. On a $75,000 salary that is $937.50 per month. If you started saving late you may need to save 20% or more to catch up. The most important factor is starting as early as possible — every decade of delay roughly requires doubling your monthly contribution to reach the same outcome due to the compounding effect.
What is a realistic investment return to use?
The S&P 500 has returned approximately 10% annually on average over the long term in nominal terms. Adjusted for inflation the real return is approximately 7%. For a diversified portfolio of stocks and bonds many financial planners use 6% to 7% as a planning assumption. Using a conservative return assumption means you will likely end up with more than projected rather than less — which is the right direction for retirement planning.
When should I claim Social Security?
If you are in good health and have other income sources to bridge the gap delaying Social Security to age 70 is often the optimal financial decision — you receive 24% more per month than at age 67 and 77% more than at age 62. The break-even point for delaying from 67 to 70 is approximately age 82 to 83. If you have reason to expect a shorter-than-average lifespan or need the income immediately earlier claiming may make more sense.
Related Calculators
- 401(k) Calculator — Project your 401(k) balance with employer match and contribution scenarios
- Tax Bracket Calculator — Understand how retirement withdrawals will be taxed
- Budget Planner — Plan your retirement monthly budget
- Investment Return Calculator — See how different return rates affect your portfolio growth