How Much Will I Need to Save For Retirement Financial Calculator

Enter your age, your current retirement savings, and a number of other variables into this financial calculator to get a personalized estimate of how much money you will need to save to replace your income in retirement.

How Does Your Retirement Savings Compare?

If you’re headed for retirement and don’t know how much money you’ll need, chances are you’re headed for trouble. A lot of Americans are.

The Economic Policy Institute reported in 2016 that the median retirement savings for families aged 56 to 61 was $17,000. That’s right at the federal poverty level for a household of two.

We can assume they either haven’t crunched the retirement numbers or they want to spend their golden years eating dog food seven nights a week.

Chances are you don’t, so we’ve devised a retirement calculator for you to find out how much you’ll need.

Here’s a quick guide to help you fill in some of the blanks. It’s pretty simple, though a few items may need explaining.

The first five figures needed – current age; annual income; spouse’s annual income; current retirement savings and desired retirement age – are self-explanatory. There are no tricks to these questions, just be honest with your answers.

Retirement Calculator Assumptions

How Long Until You Retire?

The number of years of retirement income you’ll need is an educated guess, since nobody knows exactly when they will go to The Great Beyond. But the life expectancy is 81.3 years for females and 76.3 years for males in the U.S.

So if you’re a female planning to retire at 65, on average you’ll need income for 16.3 years. You guys will need it for 11.3 years.

The average inflation rate over the past 10 years is 1.9%. If you want to err on the side of caution, use 2.5-3.0% in case the economy changes.

What Income Will You Need?

Income replacement at retirement is the percentage of money you’ll need compared to how much you’re making now. To get it, divide your gross income after retirement by your gross income before retirement.

For instance, if you’re making $75,000 annually now and plan to live on $50,000 when you retire, your income replacement is 66%.

What Kind of Return on Investment do You Expect?

The assumptions on your investment returns are a guess, but should be an easy one. Check the return for the last five years and use that same number, or maybe 1%-2% less, for post-retirement investment return. There shouldn’t be much of a change, unless you get totally defensive in retirement and put all the money in extremely conservative investments.

Conventional wisdom is you’ll need 75-80% of your current income if you want to maintain your pre-retirement standard of living. That’s largely because your taxable income will decrease significantly.

What about Social Security?

Social Security benefits are partially or full tax-free and other forms of retirement income like pensions are often exempt from state taxes. Speaking of Social Security, check out our social security income calculator.

The Social Security override amount is a projection of spousal Social Security benefits versus individual Social Security benefits. The override uses the higher of those two projections. It’s important to know this if you’re looking for an exact answer today, but not really that big a factor for most people.

Calculate Your Retirement Savings Goal

So now, go ahead and plug in all the figures.  Does the final number surprise you?

If you’re like most people, it’s higher than you expected. Most current retirees live on pensions and Social Security, but traditional corporate pensions are going the way of compact discs and VCRs.

The percentage of private-sector workers participating in pension plans fell from 38% to 13% in 2014 as companies shed benefits to employees. And the average Social Security payment in 2017 was $1,386 a month.

Those numbers represent your “fixed income.” The problem is that your retirement expenses are not fixed in stone. The biggest wild card is health care costs.

A 65-year-old couple will need about $275,000 to cover health and medical expenses through retirement, according to a study by Fidelity.  And that doesn’t include nursing home or long-term care costs.

The importance of saving, over many years, cannot be understated. There’s obviously a widespread lack of both among families near retirement since the median retirement nest egg is $17,000.

But the deficiency isn’t limited to people brought up on disco. About 41% of millennials haven’t started saving for retirement, according to a2017 study by Wells Fargo Investment Institute.

How to Save for Retirement

They are squandering the greatest weapon in the battle for a cushy retirement – time. Small investments early in your work life to company 401(k) plans, for example, turn into large payoffs later thanks to accrued interest. Financial planners recommend putting 10-15% of your income toward retirement. Easy for them to say, but there is a huge payoff.

For instance, say you are 30 years old and bring home $36,000 a year. If you put $300 toward retirement and got a 7% return, you would have $532,000 in savings when you hit age 65.

Most employers encourage that kind of saving through contributions to a 401(k) retirement fund. Typically, the employer will match a percentage of what you contribute, meaning you instantly get a return that could be as much as 100%, on your investment.

And much of the gain on that would be shielded from taxes.

But again, the problem is many Americans aren’t taking advantage of that.  Of the nearly 80% employees eligible for 401(k) plans, just 41% opt to participate.

A 2017 Vanguard report found that only 6.2% of eligible workers contributed to their IRAs in 2016. That was down from 6.9% in 2015.

Another roadblock to retirement is debt. Consumers are carrying more of it into retirement than ever before, and creditors don’t cut overdue clients any slack just because they are over 65. Figuring out whether you should save for retirement or pay off debt can be complicated.

The big drivers are mortgages, education costs and credit cards. A NerdWallet study in June 2017 found the average monthly balance for households with credit card debt was $16,883. The average mortgage debt was$182,421 and the average student loan debt was $50,626. The more those can be reduced, the easier it is to save for retirement.

No two consumers are alike when it comes to retirement planning, but one thing is constant: Knowledge is power.

Whatever your situation, you have to know how much money you will need to get by in your golden years. Once you calculate that, you can start planning how to reach your goals.

If you don’t, you’re not only headed for trouble, you’re asking for it. And like dog food, it won’t taste very good.


Choe, S., 2017 October 30. Ready for the golden years? 8 facts on retirement savings. Retrieved from

Franck, T., 2017 August 30. Nearly half of millennials haven’t started saving for retirement: Wells Fargo. Retrieved from

Morrissey, M., 2016 March 3. The State of American Retirement. Retrieved from

El Issa, E., 2017, September12.Credit Card Debt Creeps Up in Mid-2017. Retrieved from