Retirement calculator
What a monthly contribution grows to by retirement, and the income it supports under the 4% rule.
$772,315
$2,574
FI Reached!
The 4% rule suggests withdrawing 4% of your portfolio annually in retirement. FI number assumes replacing your current monthly contribution as income. This is an estimate only.
What a retirement calculator can and cannot tell you
The number on screen is the result of three assumptions: what you pay in, how long you pay in, and what the money earns. Change any one and the answer changes more than most people expect.
The return assumption dominates everything else
Paying 400 a month from age 30 to 67 at 5% a year produces roughly 512,201. The same contributions at 7% produce roughly 838,600, and at 3% roughly 324,800. None of those numbers is wrong — they are different futures. A calculator that shows one figure without naming the assumption is hiding the decision from you.
Use a real return, meaning after inflation, if you want to compare the result with today’s prices. A 5% nominal return with 2% inflation is about 2.9% real, and the purchasing power of the result is what matters at retirement.
The 4% rule is a withdrawal heuristic, not a guarantee
The rule comes from US historical data: withdraw 4% of the portfolio in the first year, then increase that amount with inflation, and the portfolio survived most 30-year periods. On 512,201 that is about 20,488 a year. It assumes a 30-year retirement, a particular stock-bond mix and no fees or taxes.
Two things break it. Sequence risk: a crash in the first five years of withdrawals does far more damage than the same crash at 75. And local reality: German retirees also draw the gesetzliche Rente, pay Abgeltungsteuer on gains, and may hold Riester or betriebliche Altersvorsorge contracts with their own rules. The 4% figure is a starting point for a plan, not a spending instruction.
What to change if the number is short
There are four levers, in order of how much they usually move the result: the savings rate, the retirement date, the cost of the investments, and the expected return. Raising savings by 100 a month for 30 years at 5% adds roughly 83,000 — more than most people expect from a single change.
Cutting fund costs from 1.2% to 0.2% adds nothing to contributions and still compounds for decades. Working two more years does two things at once: more contributions and fewer years of withdrawals. Doing all three is what makes a plan robust; relying on a higher return assumption is what makes it fragile.
Common questions
- Should I use nominal or real returns in a retirement calculator?
- Use real returns if you want to compare the result with today’s cost of living. If you use nominal returns, remember that 512,201 in 37 years will buy less than 512,201 today — at 2% inflation, about half.
- Is the 4% rule still valid?
- It is a reasonable first approximation for a 30-year retirement with a diversified portfolio, not a guarantee. It was derived from US data and assumes no fees or taxes. For longer retirements, lower withdrawal rates are safer.
- Does the state pension belong in the calculation?
- Yes, as income that reduces the amount your portfolio must cover. In Germany that is the gesetzliche Rente, in the US Social Security. Treat both as uncertain: the rules can change before you retire.
- Why does a one-point return difference change so much?
- Because the result is exponential and the horizon is long. Over 37 years, 5% and 6% differ by about a third of the final balance. That is also why costs of one percentage point matter as much as they do.