Planning for Retirement
Retirement planning is one of the most important financial exercises you can undertake. The earlier you start and the more consistently you save, the easier it becomes to build the nest egg you need. This calculator uses the 4% rule to determine how much you need saved to generate your desired retirement income, factoring in Social Security benefits.
The 4% Rule
The 4% rule is a guideline that suggests you can safely withdraw 4% of your portfolio in the first year of retirement, adjusting for inflation each year, and your money should last at least 30 years. For example, if you need $60,000 per year, you need $1.5 million saved. This rule is based on historical US market returns and is a reasonable starting point for retirement planning.
How Social Security Fits In
Social Security provides a baseline income in retirement that reduces the amount you need from personal savings. The average Social Security benefit in 2025 is approximately $1,900 per month. Check your personalized estimate at ssa.gov. Remember that Social Security alone rarely provides enough for a comfortable retirement -- it is designed to replace about 40% of pre-retirement income for average earners.
Frequently Asked Questions
How much should I save for retirement?â–¾
A common guideline is to save 15% of your gross income for retirement, including any employer match. By age 30, aim to have 1x your salary saved; by 40, 3x; by 50, 6x; by 60, 8x; and by 67, 10x. These are rough benchmarks -- your specific needs depend on your desired lifestyle, healthcare costs, and other income sources.
What if I am behind on retirement savings?â–¾
It is never too late to start or catch up. Take advantage of catch-up contributions after age 50 ($7,500 extra in a 401k, $1,000 in an IRA). Consider delaying retirement by a few years -- each year you work adds savings and reduces the number of retirement years to fund. Reduce expenses, pay off debt, and maximize every available tax-advantaged account.
Should I pay off my mortgage before retirement?â–¾
Entering retirement mortgage-free significantly reduces your expenses and required nest egg. If your mortgage rate is below your expected investment return, the math may favor investing. But the peace of mind and reduced monthly expenses of a paid-off home have real value that a spreadsheet cannot capture.
Calclypso Editorial Team
Reviewed by certified financial planners. Last updated: April 2026. Retirement projections are estimates based on consistent contributions and returns. Actual results will vary.