How to Use a Retirement Calculator to Secure Your Future

The question "Will I have enough to retire?" keeps many people up at night. The good news is that with a little planning and the help of our Retirement Planner, you can find the answer and take control of your future.

How the Calculator Works

Our tool projects your future savings based on your current habits and market assumptions. Here are the key inputs:

1. Current Age & Retirement Age

This determines your "time horizon." The more years you have until retirement, the less you generally need to save each month thanks to compound interest.

2. Current Savings

Enter the total amount you have in 401(k)s, IRAs, and other investment accounts today.

3. Monthly Contribution

How much are you saving each month? Try increasing this number by just $100 or $200 to see the massive impact it has over 20 or 30 years.

4. Expected Return

Historically, the stock market has returned about 7-10% annually after inflation. However, it's safer to use a conservative estimate like 6-7% for long-term planning.

Interpreting the Results

The calculator will show you a projected total. But is it enough? A common rule of thumb is the 4% Rule.

The 4% rule suggests you can withdraw 4% of your portfolio in the first year of retirement and adjust for inflation thereafter without running out of money for 30 years.

Example: If you want $40,000/year in retirement income from your portfolio, you need $1,000,000 saved ($1,000,000 x 4% = $40,000).

Closing the Gap

If the calculator shows you're falling short, you have three main levers to pull:

1. Save More: Cut expenses or increase income to boost monthly contributions.
2. Retire Later: Working a few extra years gives your investments more time to grow and reduces the number of years you need to fund.
3. Adjust Expectations: Plan for a more modest lifestyle in retirement.

The best time to start planning was yesterday. The second best time is today.