Retirement calculator

All calculations use real (inflation-adjusted) returns, so every figure represents today's purchasing power. "Invest X/month" is the real amount to start contributing now, on top of any existing savings. During the plan, you would increase the amount you save each year by the inflation rate to maintain the same real value. The monthly contribution is the amount going into your retirement account; income taxes on the earnings used for that contribution are outside this model.

Step 1 — Required nest egg:

• The after-tax monthly spending input is in today's money. It is multiplied by (1 + inflation)^{years until retirement} to obtain the equivalent monthly spending in retirement-year dollars.
• Retirement-year monthly spending × 12, divided by (1 − tax rate), gives the first-year pre-tax withdrawal. Dividing that withdrawal by the initial withdrawal rate gives the required retirement-year portfolio.
• The retirement-year portfolio is divided by the same inflation factor before it is displayed, so the headline nest egg and all chart values remain in today's purchasing power.
• This follows the usual initial-withdrawal-rate convention: the first year's withdrawal amount is set at retirement, then later withdrawals are assumed to rise with inflation. It is not a rule that withdraws the same percentage of the remaining portfolio each year.

Step 2 — Real return:

• Real annual return = (1 + annualized nominal return) ÷ (1 + inflation) − 1. For effective annual rates, this is the Fisher equation, which is exact (not the approximation "nominal − inflation").
• Monthly real return = (1 + annual real return)^1/12 − 1, converting via proper compounding (not dividing by 12).

Step 3 — Monthly savings:

• If you have existing savings, they compound at the real return rate over the saving period. Future real value of current savings = current savings × (1 + r)ⁿ.
• The remaining gap = target portfolio − future real value of current savings. If this gap is zero or negative, your current savings are already sufficient with no new contributions needed.
• Otherwise, using the future value of an ordinary annuity formula, solved for the payment: PMT = gap × r ÷ ((1 + r)ⁿ − 1).
• This assumes contributions are made at the end of each month. Beginning-of-month contributions would require a slightly smaller payment.
• where r = real monthly return and n = total months of saving.

Step 4 — Balance at each age:

• Balance after m months = current savings × (1 + r)^m + PMT × ((1 + r)^m − 1) ÷ r
• Money invested = current savings + PMT × m (starting savings plus new contributions)
• Investment growth = Balance − Money invested. If the real return is negative, this component is negative.

What "today's money" means concretely:

• If the calculator says "invest $900/month" and inflation is 3%, then right now you invest $900/month in nominal terms. One year later you invest $927 ($900 × 1.03). The year after, $955. Each year you invest a larger nominal amount, but each contribution buys the same goods and services as $900 buys today.
• The nest egg works the same way. "$1.4M" means $1.4M in today's purchasing power. Your account statement at retirement will show a larger nominal number, but it will buy the same things.

Limitations:

• Constant returns. Real markets are volatile. This model assumes the same return every year, ignoring sequence-of-returns risk — bad returns early in retirement are much worse than bad returns late. This is a significant simplification.
• No Social Security or pensions. These income sources reduce the amount you need from savings. Not modeled.
• No employer match. Employer 401(k) matches effectively increase your savings rate. Not included.
• Simplified taxes. A single flat rate is used. Real tax situations involve brackets, deductions, and multiple account types (traditional, Roth, taxable) with different rules. The tax input applies only to retirement withdrawals used for spending; it does not model payroll taxes, income taxes while saving, capital gains taxes, dividends, required minimum distributions, or account contribution limits.
• The initial withdrawal rate is a rule of thumb. The 4% rule was derived from US historical data (Bengen, 1994; Trinity Study, 1998) for 30-year retirements. It does not guarantee success. Longer retirements, non-US markets, higher fees, higher taxes, or unusual economic periods may require a lower rate.
• Constant real contribution rate. In reality, many people save more as their income grows. This calculator uses a single level contribution in today's money each month, which means increasing the actual nominal deposit with inflation.

The “tax rate on withdrawals” input is a simplified flat-rate assumption. A reasonable number depends on your country and account type. Some accounts tax the entire withdrawal; others tax only the investment gains, leaving your original contributions untaxed. For the latter, the effective tax rate on the total withdrawal is: tax rate on gains × fraction of portfolio that is gains. Use your actual cost basis if you know it. The “Where the money comes from” section above can help estimate future gains from this plan, but it does not know how much of your current savings is already unrealized gain.

United States

Traditional 401(k) / Traditional IRA. Contributions were tax-deductible going in, so the entire withdrawal — both original contributions and investment gains — is taxed as ordinary income. Enter your expected federal income tax bracket in retirement, plus state income tax if applicable. Typical range: 12–25%.

Roth 401(k) / Roth IRA. Contributions were made with after-tax money. Qualified withdrawals (age 59½+, account open 5+ years) are completely tax-free. Enter 0%.

Taxable brokerage account. Only the gains are taxed — your cost basis (original contributions) comes back tax-free. Long-term capital gains (assets held over one year) are taxed at 0%, 15%, or 20% depending on income; most retirees fall in the 0–15% bracket. The effective tax on the total withdrawal is: capital gains rate × gains fraction. For example, at 15% with 70% gains, enter roughly 10%. High earners may also owe the 3.8% Net Investment Income Tax.

If you expect to draw from a mix of account types, estimate a weighted average based on how much you plan to withdraw from each.

Australia

Superannuation (after age 60). Withdrawals from a taxed super fund after age 60 are completely tax-free — contributions and earnings were already taxed at concessional rates inside the fund. Enter 0%.

Taxable investment account (outside super). Only the gains are taxed. For assets held longer than 12 months, individuals receive a 50% CGT discount: half the gain is added to taxable income at your marginal rate. The effective tax on the total withdrawal is: (marginal rate + 2% Medicare levy) × 50% × gains fraction. For example, in a 30% tax bracket with 70% gains: (30% + 2%) × 50% × 70% ≈ enter roughly 11%.

Germany

Self-managed brokerage account (Depot). Only the gains are taxed. Germany uses a flat 25% Abgeltungsteuer plus 5.5% solidarity surcharge, totaling roughly 26.4% on gains (or ~28% with church tax), regardless of your income tax bracket.

For equity funds and ETFs (over 51% equity), a 30% Teilfreistellung exemption applies, reducing the effective rate on gains to roughly 18.5%. For individual stocks, the full ~26.4% applies.

The effective tax on the total withdrawal is: rate on gains × gains fraction. With equity ETFs and 60% gains: 18.5% × 60% ≈ enter roughly 11%. With individual stocks: 26.4% × 60% ≈ roughly 16%.

A €1,000/year tax-free allowance (Sparerpauschbetrag; €2,000 for couples) applies but is negligible for retirement-sized withdrawals. If your personal income tax rate is below 25%, you can apply for the lower rate instead (Günstigerprüfung).

Tax laws change frequently. These figures are approximate as of 2026. Consult a tax professional for your specific situation.