How to Calculate Retirement Savings Needs

Retirement planning combines compound growth on existing savings with regular contributions. The 4% rule suggests withdrawing 4% of your nest egg annually in retirement.

Step-by-step

1. List current retirement account balances (401k, IRA, taxable investments).
2. Estimate monthly contribution including employer match.
3. Choose a conservative real return (5–7% nominal, or 3–5% after inflation).
4. Project growth to retirement age using compound interest with contributions.
5. Apply 4% rule: nest egg × 0.04 = estimated annual retirement income.
6. Adjust contributions until projected income meets your retirement spending target.

Open the Retirement Calculator to apply these steps with your own numbers instantly.

Frequently asked questions