Retirement Planner

How to Plan for a Secure Retirement

Retirement planning can feel daunting, but it's essentially a journey of setting goals and taking consistent steps to reach them. This calculator is a powerful tool to help you visualize that journey. It projects how your savings can grow over time and what that might mean for your income in retirement.

The Key Levers of Your Retirement Plan

Your final retirement nest egg is influenced by several key factors. Understanding these can help you build a better strategy.

• Your Timeline (Current & Retirement Age): The longer your investment horizon, the more time your money has to benefit from compound growth. Starting to save in your 20s or 30s provides a massive advantage over starting in your 40s or 50s.
• Savings Rate (Current & Monthly Savings): The amount you save is a direct driver of your future wealth. The bar chart above shows your principal contributions, while the line shows how that principal is amplified by market returns.
• Rate of Return: This is the average annual growth you expect from your investments. Historically, diversified stock market portfolios have returned around 7-10% annually over the long term, though past performance is not a guarantee of future results. A higher rate of return can dramatically increase your final nest egg.

What is the 4% Rule?

The "4% Rule" is a popular guideline for retirement withdrawals. It suggests that you can safely withdraw 4% of your total retirement savings in your first year of retirement, and then adjust that amount for inflation each subsequent year, with a high probability of not running out of money for 30 years.

For example, if you retire with a $1,000,000 nest egg, the 4% rule suggests your first-year withdrawal would be $40,000. Our calculator estimates this for you, providing a tangible monthly income goal to aim for. While it's a useful starting point, it's not a one-size-fits-all rule and should be considered alongside other factors like your health, lifestyle, and market conditions.

Actionable Tips for a Better Retirement

• Pay Yourself First: Automate your savings. Set up automatic transfers from your paycheck to your retirement accounts (like a 401(k) or IRA) so you're saving consistently without having to think about it.
• Take Full Advantage of Employer Matches: If your employer offers a 401(k) match, contribute at least enough to get the full match. It's an instant, guaranteed return on your investment.
• Increase Your Savings Rate Over Time: Whenever you get a raise or a bonus, dedicate a portion of it to increasing your monthly savings contribution.
• Review Your Plan Annually: Life changes, and so should your financial plan. Check in on your progress at least once a year and make adjustments as needed to stay on track toward your goals.