How This Calculator Works

The Retirement Calculator projects your portfolio value at your target retirement age using compound growth with regular contributions, then compares it to the amount needed to fund your desired retirement lifestyle. The difference is your retirement gap (or surplus).

Monthly expenses in retirement are multiplied by 12 and then by 25 (the inverse of the 4% safe withdrawal rate) to derive the target balance. Social Security, if provided, is first adjusted for the age you start it, then subtracted from your spending, so your savings only have to cover the rest. If you retire before Social Security starts, your savings also have to pay for the years in between (the bridge). The verdict compares your projected balance with the target in today's dollars.

Inputs and Assumptions

Current age & retirement age: Determines the investment horizon (years to retirement).
Current savings: Your starting portfolio value across all retirement accounts.
Monthly contribution: The amount you add each month, assumed constant in nominal terms.
Expected annual return: Default 7%, read as an effective annual rate: money grows by exactly 7% in a year. Historical S&P 500 average is ~10%; a diversified stock/bond portfolio is typically 6–8%.
Inflation rate: Default 2.5%. Used to calculate the real (purchasing-power-adjusted) balance at retirement.
Monthly expenses in retirement: Your expected spending in today's dollars. It is not inflated: your projected balance is brought back to today's dollars instead, so the two are compared in the same prices.
Social Security at full retirement age: Optional. The monthly benefit at full retirement age from your statement at ssa.gov/myaccount, in today's dollars.
Social Security start age: 62 to 70. Left blank, it is your retirement age, but never before 62 (20 CFR 404.310). The calculator adjusts your full-retirement-age amount for this age.
Birth year: Assumed to be this year minus your current age. It sets your full retirement age (67 for anyone born in 1960 or later; 66 to 66 and 10 months for 1955 to 1959). If your birthday has not come yet this year, your real birth year may be one earlier.

Formula

The calculator uses standard future value of annuity formulas, with an effective monthly rate so that your annual return compounds to exactly that return over a year:

// Effective monthly rate (it was annualReturn / 12 until October 2026,
// which compounds 7% to 7.23% a year)
monthlyRate = (1 + annualReturn)^(1/12) - 1
months = (retirementAge - currentAge) × 12

// Future value of current savings (equals currentSavings × (1 + annualReturn)^years)
FV_savings = currentSavings × (1 + monthlyRate)^months

// Future value of monthly contributions (annuity, paid at the end of each month)
FV_contributions = monthlyContribution × [((1 + monthlyRate)^months - 1) / monthlyRate]

// Projected balance, in dollars of the retirement year
projectedBalance = FV_savings + FV_contributions

// Real (inflation-adjusted) balance: today's dollars, like your spending
realBalance = projectedBalance / (1 + inflationRate)^years

// Social Security: the full-retirement-age amount, adjusted for the start age
birthYear = thisYear - currentAge
FRA = full retirement age for birthYear (SSA schedule)
months early = (FRA - startAge) × 12
  reduction = 5/9 of 1% per month for the first 36 months early
            + 5/12 of 1% per further month           (20 CFR 404.410)
months late = (startAge - FRA) × 12, up to age 70
  increase  = 2/3 of 1% per month                    (20 CFR 404.313)
ssAtStart = ssMonthly × (1 - reduction)  or  ssMonthly × (1 + increase)
// Example: FRA 67, $2,000 at FRA: $1,400 at 62 (70%), $2,480 at 70 (124%)

// Target balance (25× rule from the 4% rule: Bengen 1994, Trinity 1998), in today's dollars
annualNeed = max(0, monthlyExpenses - ssAtStart) × 12
bridge = max(0, startAge - retirementAge) × min(ssAtStart, monthlyExpenses) × 12
targetBalance = annualNeed × 25 + bridge
// The bridge is what your savings pay from retirement until Social Security starts,
// in today's dollars, with no growth assumed.

// Monthly income from savings before Social Security starts: 4% of the real balance a year, per month
monthlyIncomeFromSavings = realBalance × 0.04 / 12
// From the Social Security start: 4% of the savings left after the bridge years, plus Social Security
totalMonthlyIncome = max(0, realBalance − ssBridge) × 0.04 / 12 + ssAtStart

// Gap, in today's dollars (the verdict uses this)
gap = realBalance - targetBalance
// The same gap in dollars of your retirement year
gapAtRetirement = projectedBalance - targetBalance × (1 + inflationRate)^years

// Verdict: ahead if gap > 20% of target; on track if gap ≥ 0; otherwise behind

Spending and Social Security are entered in today's dollars, so the projected balance is turned into today's dollars before the two are compared. Comparing a future balance with today's prices would overstate how ready you are, by more the further away retirement is.

Data Sources

Bureau of Labor Statistics (BLS) — Inflation assumptions based on CPI historical averages.
Social Security Administration (SSA) — Publication 05-10137 (April 2026), “Your Payments While You Are Outside the United States”, for the retire-abroad mode: US citizens keep receiving benefits abroad except in countries SSA cannot send payments to. A social security (totalization) agreement does not decide this.
Bengen (1994) and the Trinity Study (Cooley, Hubbard, Walz, 1998) — the 4% safe withdrawal rate used to derive the target balance (Bengen derived it; Trinity tested it further).

Limitations

Uses a constant annual return — does not model volatility or sequence-of-returns risk.
Does not account for taxes on withdrawals (traditional vs. Roth).
Assumes contributions remain constant (no raises, job changes, or interruptions).
Does not model state taxes, Required Minimum Distributions (RMDs), or Medicare surcharges.
Social Security is the figure you enter, adjusted only for the start age. Actual benefits depend on your 35-year earnings history, and your statement assumes current law. Spousal and survivor benefits, and the earnings test before full retirement age, are not modelled.
The adjustment assumes a birth year of this year minus your age, and uses whole starting ages from 62 to 70.
The 4% rule was tested on 30-year retirements. A longer retirement (for example retiring at 50 or 55) may warrant a lower withdrawal rate (3–3.5%), which would raise your target.
With Retire Abroad on, the page shows two results: the headline for retiring in the US, and the abroad panel for the same plan in the country you picked. Each is labelled with its scenario.

Last Updated

April 2026 — Updated return rate guidance and inflation default to reflect current economic conditions. Formula and methodology unchanged.

8 October 2026 — Social Security is now entered as the benefit at full retirement age, and the calculator adjusts it for the age you start (20 CFR 404.410 and 404.313). Before, one amount was used at every start age, so starting at 70 looked worse than starting at 62. The monthly growth rate is now the effective monthly rate, not the annual return divided by 12 (the default case went from $1,475,835 to $1,389,536). The bridge for the years before Social Security starts, the today's-dollar comparison and the abroad labelling are described above; this page previously still described the 4 October version.

4 October 2026 — The calculator now does what this page describes. It compares your balance with your target in today's dollars, and Social Security reduces the target. Before this it compared the future balance with today's-dollar spending and ignored Social Security, which could show “ahead of schedule” for someone a third short. The retire-abroad mode no longer cuts Social Security for countries without a social security agreement.

Retirement Calculator — Methodology