How to use the retirement calculator
- Enter your current age and target retirement age.
- Add current savings and your monthly contribution.
- Set an expected return and inflation rate.
- Choose a withdrawal rate — 4% is a widely cited starting point, not a guarantee.
The formula
Real value = Nominal balance ÷ (1 + inflation)^years; Income ≈ Real value × withdrawal rate ÷ 12
Inflation-adjusting the result shows what the nest egg will buy in today's prices — the number that actually matters.
Worked example
At 32 with 40,000 saved, contributing 800 a month at 6.5% until 62 produces a large nominal balance — but after 2.5% inflation, its purchasing power is far smaller. That real figure × 4% ÷ 12 is your estimated monthly income in today's money.
Tips from the numbers
- Capture any employer match first — it's an instant return.
- Raise contributions with every pay rise; you won't miss money you never got used to.
- Government pensions and benefits add to this income — include them in your plan.
- Revisit annually; small course corrections beat big late ones.
Watch: learn the concept
Frequently asked questions
What is the 4% rule?
A guideline from historical studies suggesting a 4% initial withdrawal, adjusted for inflation, has often lasted about 30 years. It is not guaranteed and depends on markets and fees.
Why adjust for inflation?
A dollar in 30 years buys much less than today. The inflation-adjusted figure tells you real lifestyle.
Is a 6–7% return realistic?
It depends on your asset mix and future markets. Many planners use lower assumptions to build in a safety margin.
Should I include my home?
Usually not, unless you plan to sell or downsize to fund retirement.