🏖️ Retirement Calculator

Step 1: Annual income needed in retirement = Current income x Replacement Rate (80%) Step 2: Subtract guaranteed income = Annual needed - Social Security - Pension Step 3: Apply withdrawal rate (4% rule) Nest Egg Needed = Annual from savings / Withdrawal Rate Example: Current income: $95,000 Need 80%: $76,000/year SS income: $26,400/year From savings: $76,000 - $26,400 = $49,600/year At 4% rule: $49,600 / 4% = $1,240,000 needed

FV = PV x (1 + r)^n + PMT x [(1+r)^n - 1] / r Where: PV = Current savings r = Monthly return rate (annual / 12) n = Months to retirement PMT = Monthly contributions (yours + employer) This gives your projected nest egg at retirement.

The 4% rule (Bengen, 1994): Withdraw 4% of nest egg in year 1, then adjust for inflation each year. Portfolio historically lasts 30+ years. Example: $1,000,000 nest egg Year 1 withdrawal: $40,000 (4%) Year 2 (3% inflation): $41,200 Research shows 3.3-3.5% is safer for 40-year retirements. Many planners now use 3.5% as conservative estimate.

Nest Egg = Annual Spending x 25 (This is the inverse of the 4% rule) Annual from savings x 25 = Nest Egg needed Example: Need $50,000/year from portfolio Nest Egg = $50,000 x 25 = $1,250,000 With 3.5% withdrawal: multiply by 28.6 With 3% withdrawal: multiply by 33.3

401(k): $23,500/year ($31,000 if age 50+) IRA/Roth IRA: $7,000/year ($8,000 if age 50+) SEP-IRA: 25% of comp, max $70,000 SIMPLE IRA: $16,500 ($20,000 if age 50+) Employer match: Usually 50-100% of your contribution up to 3-6% of your salary. FREE MONEY — always max the match first!