Retirement Needs Calculator

This calculator can help you determine what sort of lifestyle you can expect to have during retirement, by showing your 401(k) account balance both before and during retirement. The goal is to let you experiment with different savings amounts so that you can see what effect they will have on you during your years in retirement. The results presented by this calculator are hypothetical and are not intended to represent or predict any investment results. It is unlikely that any one rate of return will be sustained over time. Investments offering the potential for higher rates of return also involve a higher degree of risk to principal. Both the return and the principal value of investments will fluctuate over time.

Salary:
Enter your current annual salary or annual wages here. If you are married enter the sum of both of your salaries.
Contribution Percentage:
Enter a percentage between 1% and 25% that represents the percentage of your income that you wish to contribute to your 401(k) account. Individuals may contribute up to 100% of compensation subject to the annual dollar limit for the year concerned (see below) to 401(k), 403(b), and 457 plans.
2009 $16,500 (...$5,500)
Match Percentage:
If your company matches your contributions, enter the matching percentage it uses (for example, if your company matches 3% of your salary, enter 3 here). If your company does not match, enter zero.
Pre-retirement Rate of Return:
Enter the rate of return you expect to earn on your 401(k) account prior to retirement. You should note your personal risk tolerance as well as current market and economic conditions when selecting a rate of return. To give you an idea, equity investments may provide a 8% average annual return over a long period of time. But keep in mind that the return and principal value will fluctuate over time and it is possible to lose money.
Post-retirement Rate of Return:
Enter the rate of return you expect to earn once you retire. See the previous field for an explanation. You might enter 8% in the previous field and 5% here, for example.
Inflation Rate:
Enter the expected inflation rate during the coming years. You might use 3% which is the approximate historical average since 1925.
Salary Increase Rate:
Presumably your salary will rise over the years. It will probably, at a minimum, rise with the inflation rate in the form of cost-of-living increases. It may rise faster than that depending on the job you hold. Enter the rate at which you expect your salary or wages to increase. If you are unsure, enter the inflation rate from the previous field here.
Current 401(k) Value:
Enter the current value of any 401(k) accounts you have now.
Current Age:
Enter your current age.
Expected Retirement Age:
Enter the age at which you plan to retire. 65 is average, but you might want to consider early retirement options.
Desired Retirement Income:
Enter the amount of money you would like to have to spend each year during retirement, in today's dollars. For example, if you look at yourself and say, "If I were to retire today, I would feel comfortable if I had $30,000 per year to spend" then enter $30,000 here. Remember that you will have to pay taxes on that amount just like you do today, so take that fact into account.
401(k) Account Value at Retirement:
This will be the total value of your 401(k) account when you retire.
Year Value
1 year value:
This is the total value of your 401(k) account at the end of your first year in retirement.
2 year value:
This is the total value of your 401(k) account after two years in retirement.
3 year value:
And so on...
4 year value:
5 year value:
10 year value:
20 year value:
30 year value:
40 year value:

Note: This calculator assumes the function of an ordinary annuity, i.e., the money is contributed at the end of the calendar year. Further, the post-retirement income is withdrawn on the first of each month, and the money needed to maintain your standard of living is adjusted for inflation on an annual basis.

The tax deferral accrual feature is provided by tax qualified retirement plans. Therefore, the tax deferral accrual feature of an annuity is unnecessary. Please consider whether the features and benefits of annuities, including, but not limited to, lifetime income payments and insurance company-guaranteed annuity rates are appropriate for your needs.