How this calculator works
The calculator runs a year-by-year forecast from your current age to your life expectancy. Each working year, your income grows, your expenses rise with inflation, taxes are estimated, and your contributions and employer match are added to your retirement savings. Each retirement year, the forecast withdraws from your savings, adds Social Security, and estimates the taxes on what you take out.
It is the same forecast engine OpenWealth uses inside the app. Here are the assumptions it makes:
- The 4% rule. Your retirement target is 25 times the yearly spending that Social Security doesn’t cover (25 × 4% = 100%). From the year you retire, 4% of your starting retirement balance is withdrawn each year and raised with inflation.
- Social Security. It is estimated at about 40% of your current income, adjusted for the larger benefit you get by claiming at 70, and starts at age 70. Your actual benefit depends on your earnings history; ssa.gov has your personal estimate.
- Investment returns. Before retirement, savings grow at the investment return you enter (7% by default). After retirement, the forecast assumes a more conservative 5% return. Cash earns 2%.
- Contributions. Your contributions and your employer’s match go into your traditional (pre-tax) 401(k) or IRA. Your own contributions are capped at the 401(k) limit, which grows with inflation.
- Shortfalls before retirement. If your spending is more than your take-home pay before retirement, the gap comes out of your savings: cash first, then taxable, then traditional (with the 10% early-withdrawal penalty), then Roth.
- Withdrawals in retirement. Withdrawals come from cash, then taxable (with capital gains tax on the gains), then traditional (taxed as income), then Roth (tax-free).
- Taxes. They are estimated from federal brackets, a typical rate for your state, and payroll taxes while you work. Retirement state taxes apply after you retire.
- Defaults. 3% inflation, 3% income growth, a life expectancy of 90, and retirement spending of 80% of what you spend today. You can change all of these under Advanced.
How to read your results
Retirement readiness gives one of three verdicts. On track means your projected balance at retirement meets or beats your 25× target. At risk means your money lasts through your life expectancy, but your balance falls short of the target, so there is little room for bad markets or surprise costs. Off track means your savings are projected to run out before your life expectancy.
Estimated monthly income in retirement is your 4% withdrawal plus Social Security, after taxes. It is compared with the monthly spending you expect in retirement to show a surplus or a shortfall.
The projection chart shows your invested balance by age: the solid line while you are saving, the dashed line once you start drawing it down, and the target line you are aiming for.
The year-by-year table breaks every year into income, contributions, expenses, taxes and withdrawals, and shows your balances by account. Expand a row to see what it is made of.
The Today’s dollars toggle switches every number between inflation-adjusted dollars (what the money would buy today) and nominal dollars (the actual dollar amounts in that future year). Today’s dollars are usually easier to compare with your current budget.
Retirement calculator FAQ
What is the 4% rule?
The 4% rule is a retirement rule of thumb: withdraw 4% of your portfolio in your first year of retirement, then raise that amount with inflation each year. In US market history, that pace lasted at least 30 years in nearly every period. It also gives a quick savings target: 25 times the yearly spending your savings need to cover.
How much do I need to retire?
Using the 4% rule, you need about 25 times the yearly spending that Social Security and other income won’t cover. If you expect to spend $60,000 a year and Social Security covers $25,000 after tax, you need roughly 25 × $35,000 = $875,000. The calculator works this out for you in today’s dollars.
Is this retirement calculator free?
Yes. It is free, needs no account, and doesn’t save what you enter. Reloading the page starts over with the example values.
How is Social Security estimated?
As a simple estimate: about 40% of your current income, adjusted for claiming at 70, starting at age 70. Your real benefit depends on your full earnings history and when you claim. You can get your personal estimate from your my Social Security account at ssa.gov.
What is the difference between today’s dollars and nominal dollars?
Nominal dollars are the actual amounts in a future year. Today’s dollars remove inflation, so $1 million in 30 years shows as what it would buy today, roughly $410,000 at 3% inflation. Use the toggle to switch every result between the two.
Why does it ask for traditional, Roth and taxable savings separately?
Because they are taxed differently when you take money out. Traditional 401(k) and IRA withdrawals are taxed as income, Roth withdrawals are tax-free, and taxable brokerage withdrawals owe capital gains tax on the gains. The split changes how much of each withdrawal you actually get to spend.
How accurate is this calculator?
It is an estimate, not a guarantee. It uses steady returns and inflation every year, while real markets move up and down, and its tax and Social Security figures are approximations. Use it to see whether you are roughly on track and which changes move the result the most, such as saving more or retiring later.