Why Retirement Planning Matters
Retirement may last 20–30+ years. Social security or pensions rarely replace 100% of pre-retirement income — personal savings fill the gap.
The earlier you start, the more compound growth works for you. Waiting until your 40s or 50s means much larger required contributions to hit the same goal.
The 4% Rule (Guideline, Not Law)
A common rule of thumb: withdraw 4% of your initial retirement portfolio in year one, then adjust for inflation each year. Historically studied on US portfolios — past performance ≠ your future.
Factors that break simple rules:
- •Sequence-of-returns risk (bad early years hurt)
- •Longevity (living to 95+)
- •Healthcare inflation
- •Taxes on withdrawals
How Much to Save?
Rules of thumb (e.g. 15% of income including employer match) are starting points. Better approach:
- •Estimate annual spending in retirement
- •Subtract guaranteed income (pension, SS)
- •Multiply the gap by 25–30× (rough inverse of 4%) for a portfolio target
Then back-solve monthly savings using expected return and years to retire — our calculator helps with that projection.
Inflation Is the Silent Enemy
If inflation averages 3%, costs double in ~24 years (Rule of 72). Your retirement number in today's dollars is much smaller than in future dollars.
Model real returns (after inflation) or inflate expenses explicitly — don't use nominal returns on nominal goals without thinking.
Account Types and Tax Advantage
| US examples | Idea |
|---|---|
| 401(k) / IRA | Tax-deferred or Roth — different timing of tax |
| HSA | Triple tax advantage if used for health |
Fees and asset allocation matter as much as contribution rate — low-cost index funds are a common default for long horizons.
How to Use This Retirement Calculator
Enter current age, retirement age, current savings, monthly contribution, expected return, employer match if any, and inflation. Review projected balance at retirement and whether you're on track for your spending goal.
Adjust inputs to stress-test — what if returns are 2% lower?