Retirement income calculator
See the steady yearly income your savings and Social Security or a pension could pay from the age you stop, in today's money.
Stopping at 62, the income you could spend every year, before tax, in today's money:
$64,164 a year
That is $5,347 a month from a pot of $1,113,207 at 62: the pot pays all of it for 5 years, then $24,000 of Social Security or pension covers part from 67, and the pot pays the other $40,164.
- The pot alone, at 4%
- $44,528 a year
- What Social Security or the pension adds
- $19,636 a year
A steady return every year and the same income every year, in today's money. Not modeled: income tax, the order in which good and bad years arrive (see the Monte Carlo calculator), spending that changes with age, and any income that stops. The link carries your figures after the #, so you can save or share it. Your figures are not sent to us.
Stopping before 59½? Money from a 401(k) or traditional IRA usually carries a 10% additional tax that this calculator does not add. See how to draw on retirement accounts before 59½.
Start from what you have, not from a target
Most retirement calculators ask how much you need. This one turns it round: given what you will have and when Social Security or a pension starts, what can you spend? If the answer is above your spending, you have room; if it is below, the gap is the number to work on.
Stopping earlier means a longer stretch before the guaranteed income starts, paid entirely from savings, so the steady income falls. Change the stop age to see how much each year of work adds.
Questions people ask
- How much income will my savings give me in retirement?
- A common starting point is a withdrawal rate: at 4%, each $100,000 supports about $4,000 a year, rising with prices. The calculator applies your rate to what you will have when you stop, and adds Social Security or a pension from the age it starts. If that figure would run out before 100 at the return you enter, it shows the most that lasts to 100 instead.
- How does Social Security change my retirement income?
- It pays part of your spending from the age you claim. Before that, your savings pay all of it; after, only the rest. The calculator finds the one steady income that works across both stretches, so you do not have to live on less early and more later.
- Does a pension or Social Security rise with prices here?
- Yes, the calculator assumes it does. Every figure is in today's money, so the pension or Social Security amount you enter is held at that buying power for life. A pension with no cost-of-living increase loses buying power every year, so for one like that, enter a lower amount than the first-year figure.
- What if I stop before 59½?
- The income shown does not include any tax or penalty. Money taken from a 401(k) or traditional IRA before 59½ usually carries a 10% additional tax on top of income tax, unless an exception applies, and Social Security retirement benefits cannot start before 62. If you stop before 59½, the steady income here overstates what you keep from those accounts. The income here also leaves out the cost of health cover: Medicare usually starts at 65, so anyone stopping earlier needs other health cover until then, and the income here does not pay for it.
- Is the 4% rule safe?
- It is not a guarantee. It comes from US market history: Bengen's 1994 study found that a 4% first-year withdrawal, raised each year with prices, lasted at least 30 years in the historical periods he studied, for a portfolio of half US stocks and half intermediate-term Treasuries. He used data from 1926, assumed the mix was rebalanced and that the money sat in tax-deferred accounts, and put the sensible range at 50% to 75% stocks. A mix outside that range, longer retirements, other countries and higher fees argue for a lower rate. The Monte Carlo calculator shows how often a plan lasts when returns vary.
Sources: the 4% rate, W. P. Bengen, “Determining Withdrawal Rates Using Historical Data”, Journal of Financial Planning (1994); the additional tax before 59½, IRC §72(t).