Retirement Calculator
Two numbers decide a retirement plan: what you will need, and what you are on course to have. This puts them side by side.
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How it works
The corpus you need is driven by the income you want, inflated to the year you retire and then multiplied out across the years you expect to spend in retirement. Because that money keeps earning while you draw it down, the multiple is lower than simply years × annual spending.
Against that sits your projection: what you already hold, grown to retirement, plus what your current monthly saving will add. The difference between the two is the only number that matters, and it is usually the first time people see it stated plainly.
Corpus needed = annual spend at retirement × ((1 − (1 + real)⁻ʸ) ÷ real)
- Annual spend — what a year of retirement costs in today’s money
- real — the return you expect in retirement, less inflation
- y — the number of years the corpus has to last
- Shortfall — corpus needed less corpus projected
Worked example
Age 35, retiring at 60, needing 600,000 a year, with 1,500,000 saved and 25,000 a month going in
Inputs
Results
Inflation is doing the damage: 600,000 of spending today becomes 2,575,122 a year by the time this saver retires. Closing the shortfall takes only about 2,562 more a month, because there are 25 years for it to compound.
Frequently asked questions
Why is the corpus so much larger than my annual spending suggests?
Because of inflation over the years before you retire. At 6%, costs roughly quadruple over 25 years — so the first year of retirement costs four times what the same lifestyle costs today, and every year after that costs more again.
Should the return be the same before and after retirement?
Usually not. Most people reduce risk as they approach and enter retirement, so the post-retirement return is typically set a few points lower. Both are separate inputs here for that reason.
How many retirement years should I plan for?
Plan past your life expectancy, not to it — running out of money is a far worse outcome than leaving some behind. Thirty years from a retirement in the early sixties is a common planning assumption.
Is my data sent anywhere?
No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.
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