Retirement Calculator: How Much to Save for the Life You Want
Short answer: a retirement calculator works backwards from the life you want. Take your yearly spending in retirement, multiply by 25 for a target, then work out the monthly saving that reaches it by your retirement date. For $60,000 of yearly spending the target is $1,500,000, which takes about $3,246 a month over 20 years or $1,493 a month over 30 years, assuming a 6% return after inflation.
Key takeaways
- Target = yearly spending in retirement × 25 (the reverse of the 4% rule), less Social Security or a pension.
- Monthly saving falls fast as the years to go rise: $60,000 of spending needs $9,153 a month over 10 years but $1,493 over 30.
- Work in today's dollars with a return after inflation, or the numbers mislead.
- A calculator is only as good as its assumptions. Test a cautious return as well as a hopeful one.
What goes into a retirement calculator?
| Input | What it means | Example |
|---|---|---|
| Years to go | Retirement age minus today's age | 20 or 30 years |
| Spending in retirement | Yearly cost of the life you want, in today's dollars | $40,000, $60,000, $80,000 |
| Other income | Social Security, pension, part-time work | Subtracted from spending |
| Savings today | What you already have | Grows until retirement |
| Return | Yearly growth after inflation | 6% in the tables below |
How much do you need to save each month?
The table shows the monthly saving needed to reach 25 times yearly spending, starting from zero, at a 6% return after inflation, so targets are in today's dollars.
| Yearly spending | Target (25×) | 10 years to go | 20 years | 30 years |
|---|---|---|---|---|
| $40,000 | $1,000,000 | $6,102 | $2,164 | $996 |
| $60,000 | $1,500,000 | $9,153 | $3,246 | $1,493 |
| $80,000 | $2,000,000 | $12,204 | $4,329 | $1,991 |
If you already have savings, subtract what they will grow to. For example, $100,000 saved today grows to about $320,714 in 20 years at 6%, so a $1,500,000 target needs only $1,179,286 of new saving, which is about $2,552 a month rather than $3,246. Every dollar saved early does the work of several saved late. See compound interest and the Rule of 72.
Why use today's dollars?
Prices rise, so $60,000 of spending today will cost more in 30 years. At 3% inflation it is about $145,636 a year, and 25 times that is $3,640,894. The two views are the same plan: $1,500,000 in today's dollars equals about $3,640,894 in future dollars, and a 6% return after inflation is about 9.2% before it. Pick one view and stay in it. Mixing them makes people think they need far too little or far too much.
How do you use the result?
- Subtract guaranteed-for-life income. Social Security and any pension lower the amount you draw. See how much you need to retire.
- Compare the monthly figure with what you can save. If it is too high, change one lever: later retirement, lower spending, a higher return assumption (use caution) or more income.
- Check against benchmarks. See am I on track for retirement and am I saving enough for retirement.
- Test the downside. Rerun with a 4% return and see what changes.
- Check how long it lasts. See will my money last in retirement.
Which levers move the number most?
| Lever | Effect on the $60,000 case with 20 years to go |
|---|---|
| Retire 5 years later (25 years to go) | Monthly saving falls from $3,246 to about $2,165 |
| Spend $10,000 less a year | Target falls by $250,000, and saving falls by about $541 a month |
| Social Security of $24,000 a year | Target falls to $900,000, saving falls to about $1,948 |
| Start with $100,000 saved | Saving falls to about $2,552 |
The biggest levers are time, other income and spending. Try your own mix in the free Goal check, which tests a retirement amount against a date and the free monthly money you have.
How sensitive is the answer to the return you assume?
The return you assume changes the monthly saving a lot. For the $60,000 case ($1,500,000 target) with 30 years to go:
| Return after inflation | Monthly saving needed |
|---|---|
| 4% | $2,161 |
| 5% | $1,802 |
| 6% | $1,493 |
| 7% | $1,230 |
A difference of one percentage point moves the monthly figure by $250 to $360. Many planners suggest using a conservative figure for planning, since falling short costs more than overshooting. If the 4% case is out of reach, that tells you to build in margin: a later retirement date, lower spending or more saving. See sequence-of-returns risk.
What mistakes make retirement calculators misleading?
- Using nominal returns with today's dollars. Pick one view. See above.
- Ignoring taxes. Traditional account withdrawals are taxed, so the spendable amount is lower.
- Assuming a high return. A 10% assumption cuts the monthly figure and the margin for error together.
- Forgetting healthcare. It is often the cost that grows fastest.
- Running it once. Update it each year, since income, goals and markets change.
How often do you rerun it?
Once a year, plus after any big change: a raise, a job change, a new child, a divorce or a market fall. Keep a note of your inputs so you can see how the answer moves. A gap that shrinks each year means you are on course. For a quick benchmark check, see am I on track for retirement.
Sources and further reading: SEC Investor.gov has a free retirement planning calculator, and the IRS lists current contribution limits.
General education, not financial or investment advice. Reviewed October 2026. Figures assume a constant 6% annual return after inflation, deposits at the end of each month, no taxes and the 25 times rule, which is a guideline. Returns are not guaranteed, and investing involves risk, including loss of principal.
Frequently asked questions
How does a retirement calculator work?
It takes your years to go, expected spending, other income, current savings and an assumed return, then works out the target and the monthly saving that reaches it. A common target is 25 times yearly spending.
How much do I need to save each month for retirement?
For $60,000 of yearly spending, the target is $1,500,000, which needs about $3,246 a month over 20 years or $1,493 over 30 years at a 6% return after inflation, starting from zero.
What return should I use in a retirement calculator?
Many planners use 5% to 7% after inflation for a diversified portfolio, and a lower figure to be cautious. Returns vary and are not guaranteed, so test more than one.
Should I use today's dollars or future dollars?
Pick one and stay in it. Today's dollars with a return after inflation is simpler. Future dollars need an inflation assumption on spending as well, and mixing the two gives misleading answers.
How do Social Security and pensions change the result?
They lower the amount you must draw from savings. Subtract them from yearly spending before multiplying by 25. In the example, $24,000 of Social Security cuts the target from $1,500,000 to $900,000.