Enter your current savings, contributions, and retirement goals. Monte Carlo simulation shows your probability of not running out of money.
The amount you need depends on your annual spending, how long you expect to live in retirement, and what return your investments generate. A common starting point is the 25x rule: multiply your desired annual spending by 25. If you want to spend $50,000 per year, you need roughly $1.25 million saved by retirement. This is based on the 4% safe withdrawal rate, which research suggests gives you a high probability of not running out of money over a 30-year retirement.
This retirement calculator runs two phases. In the accumulation phase (from your current age to retirement), it grows your savings with investment returns and monthly contributions. In the withdrawal phase (retirement to life expectancy), it deducts your annual spending adjusted for inflation while continuing to earn investment returns on the remaining balance. The Monte Carlo simulation runs 1,000 scenarios with randomised returns to show you not just the expected outcome, but the range of possible outcomes — including worst cases.
The 4% rule comes from the Trinity Study, which analysed historical US stock and bond returns. It found that withdrawing 4% of your portfolio in year one, then adjusting that amount for inflation each year, had a very high success rate over 30-year periods. However, the rule has limitations: it was based on US data during a historically favourable period, it does not account for taxes or fees, and a 30-year retirement may not be long enough if you retire early. This calculator lets you test your own assumptions with Monte Carlo simulation.
A simple calculation that assumes steady 7% returns every year is misleading. In reality, markets are volatile — some years are up 30%, others are down 20%. The order of returns matters enormously in retirement: a market crash early in retirement can devastate a portfolio even if average returns are good. Monte Carlo simulation accounts for this by running thousands of random scenarios, giving you a probability of success rather than a single unrealistic number.
Most financial planners recommend targeting at least 80-90% probability of success. Below 70%, you should consider increasing savings, reducing spending expectations, or delaying retirement. Above 95% may mean you are being overly conservative and could enjoy a higher standard of living.
A diversified portfolio of stocks and bonds has historically returned 6-8% after inflation over long periods. The default of 7% nominal (about 4% real after 3% inflation) is a reasonable starting assumption for a balanced portfolio. Be wary of assuming returns higher than 8% — that requires a very aggressive, stock-heavy allocation.
No. This calculator does not include Social Security, pensions, annuities, or other income sources. To account for these, reduce your annual spending amount by the expected income from those sources. For example, if you expect $20,000/year from Social Security and need $50,000 total, enter $30,000 as your annual spending.
Inflation erodes purchasing power over time. If you need $50,000 today, you will need roughly $90,000 in 20 years at 3% inflation to maintain the same lifestyle. This calculator adjusts your spending for inflation during retirement automatically, which is why the "real return" (return minus inflation) is what ultimately determines your outcome.
You have several levers to improve it: increase monthly contributions (even small increases compound over decades), reduce expected retirement spending, plan to work a few years longer (which both adds saving years and shortens withdrawal years), or consider a part-time income in early retirement. Delaying retirement by even 2-3 years can dramatically improve your probability of success.