Retirement / FIRE Calculator

How retirement planning works

Retirement planning boils down to a simple equation: can your portfolio grow fast enough to reach a target, then shrink slowly enough to last through retirement? The answer depends on four inputs: how much you currently have saved, how much you contribute each month, how your investments perform, and how much you spend in retirement.

The 4% rule — the most widely cited guideline — says you can withdraw 4% of your portfolio in your first year of retirement, adjust that amount for inflation each subsequent year, and have a high probability of your money lasting 30+ years. This means you need roughly 25× your annual spending saved. If you spend $60,000/year, your target is $1.5 million. This calculator models your path to that number and then beyond, showing your drawdown phase as well.

Why it matters to your money

Most people don't realize how much their savings rate impacts their retirement timeline. Going from a 15% to a 25% savings rate can shave a decade or more off your years to retirement. Meanwhile, lifestyle creep — spending more as you earn more — is the single biggest threat to retirement progress. Every dollar of extra spending now costs you roughly $50 in future contributions (assuming 30 years at 7% returns).

Read the full explainer on the FIRE movement for more context on the philosophy of early retirement, the role of high savings rates, and different approaches to the transition.

Rules of thumb

• Save 15% minimum: This is the widely recommended baseline for retiring at traditional age 65. For FIRE (financial independence, retire early), aim for 50%+ savings rate.
• Capture every employer match: Free money. If your employer matches 50% up to 6% of salary, contribute at least 6%. Not doing so is equivalent to taking a 50% pay cut on that portion of your compensation.
• Your spending matters more than your income: Retirement readiness is determined by the gap between income and expenses, not the size of your salary. A $80K earner who spends $50K is better positioned than a $200K earner who spends $190K.

The cost of starting late: $500/month at 7%

The single most important retirement decision is when you start. The table below shows the projected portfolio balance at age 65 for someone contributing $500 per month at a 7% average annual return, depending solely on the starting age. All three investors contribute the same monthly amount — only their start date differs.

The investor who starts at 25 ends up with more than five times the balance of the one who starts at 45 — despite contributing only twice as much money. The 20-year head start alone generates over $1 million in extra wealth. This is the compounding effect made concrete: every decade of delay roughly halves the final outcome.

Strategies to maximize your retirement savings

Reaching retirement readiness isn't just about picking a savings rate — it's about using every available tool in the right order. The following strategies, applied consistently, can dramatically accelerate your timeline.

• Capture the full employer match first. An employer match is an immediate 100% return on the matched portion of your contribution — nothing in the market can compete with that. Always contribute enough to your 401(k) to receive the maximum match before directing money anywhere else.
• Max out tax-advantaged accounts in priority order. After the employer match, consider: Roth IRA ($7,000/year in 2024; $8,000 if age 50+) for tax-free growth, then back to your 401(k) up to the $23,000 limit, then HSA if you have a qualifying high- deductible health plan. Any remaining savings can go into a taxable brokerage account.
• Increase your savings rate by 1% every year. Raising your savings rate from 10% to 15% feels painful. Raising it 1% per year over five years is barely noticeable with each individual raise. This "save more tomorrow" approach, studied extensively by behavioral economists, is one of the most effective ways to close a retirement gap without feeling deprived.
• Delay Social Security to age 70 if health allows. Each year you delay claiming Social Security past full retirement age (67 for most people today), your benefit grows by roughly 8%. Waiting from 67 to 70 increases your monthly benefit by 24% — for life. This is a guaranteed, inflation-adjusted return that no investment can reliably match.
• Run Roth conversions in low-income years. If you retire before Social Security kicks in, or if your income dips in a given year, strategically converting traditional 401(k) or IRA funds to Roth at a lower tax rate reduces future required minimum distributions (RMDs) and creates tax-free income later.