Retirement Income Calculator

How Much Retirement Income Will You Need?

The traditional rule of thumb is that you'll need 70–80% of your pre-retirement income to maintain your lifestyle. If you earned $100,000 before retiring, that means $70,000–$80,000 per year or roughly $5,800–$6,700 per month. But this is only a starting point — your actual needs depend on whether you've paid off your mortgage, your healthcare costs, where you live, and how actively you plan to spend.

Many retirees find that expenses follow a "smile" pattern: higher spending in the early "go-go" years (travel, hobbies), lower in the "slow-go" middle years, then rising again in the "no-go" years due to healthcare and long-term care costs.

The 4% Rule — Still Relevant?

The 4% rule, developed from the 1994 Trinity Study, says you can withdraw 4% of your portfolio in the first year of retirement, then adjust for inflation each year, and have a high probability of your money lasting 30 years. On a $1 million portfolio, that's $40,000 in year one.

Recent research suggests 3.5–4% may be more appropriate given lower expected returns and longer life expectancies. Our calculator uses your actual numbers rather than a single rule — it projects how long your savings will last based on your withdrawal rate, investment returns, and inflation.

Tax-Efficient Withdrawal Order

The order in which you draw from different accounts significantly impacts how long your money lasts. The generally recommended sequence:

1. Taxable accounts first — These have the lowest tax drag (capital gains rates) and don't trigger RMDs.
2. Traditional 401(k)/IRA next — Withdrawals are taxed as ordinary income. Draw these before Roth to let Roth continue growing tax-free.
3. Roth accounts last — Tax-free withdrawals with no RMDs. Maximum compounding benefit.

In practice, many retirees benefit from a blended approach — withdrawing some from each account type to manage their tax bracket year by year and take advantage of lower brackets.

Social Security Timing Matters

Social Security replaces about 40% of pre-retirement income for average earners. You can claim as early as 62 (with a permanent ~30% reduction) or delay until 70 (earning an 8% bonus per year past full retirement age). For someone with a full retirement age of 67, the difference between claiming at 62 vs. 70 is roughly 77% more monthly income. Delaying is one of the best "investments" available — guaranteed 8% annual return with inflation adjustment.

Healthcare — The Biggest Wildcard

Fidelity estimates that a 65-year-old couple retiring in 2026 will need approximately $315,000 for healthcare costs throughout retirement (not counting long-term care). Medicare covers much but not all: premiums for Parts B and D, Medigap supplemental insurance, dental, vision, hearing, and prescription copays all come out of pocket. Before age 65, if you retire early, marketplace health insurance can cost $1,000–$2,000/month per person.

Retirement Income Sources Comparison

Frequently Asked Questions

How much do I need to retire comfortably?

A common benchmark is 25x your annual expenses (the inverse of the 4% rule). If you need $60,000/year beyond Social Security, aim for $1.5 million in savings. This calculator helps you see if your actual numbers are on track.

When should I start taking Social Security?

Each year you delay past 62 increases your benefit by about 7-8%. Waiting until 70 gives you roughly 77% more than claiming at 62. If you have other income sources to bridge the gap, delaying is usually the best strategy.