Retirement Calculator
Frequently Asked Questions
How does the retirement calculator work?
Our retirement calculator uses compound interest formulas to project your future savings:
- Considers both current savings and future contributions
- Accounts for investment returns over time
- Adjusts for inflation impact on purchasing power
- Uses the 4% rule for sustainable retirement income
What is the 4% withdrawal rule?
The 4% rule is a widely-used retirement planning guideline that suggests:
- Withdraw 4% of your savings in your first year of retirement
- Adjust this amount annually for inflation
- Designed to make savings last 30+ years
- Based on historical market performance studies
How should I choose my return rate?
Your return rate should reflect your investment strategy:
- Conservative (5%): Mostly bonds and stable investments
- Moderate (7%): Balanced mix of stocks and bonds
- Aggressive (9%): Primarily stocks for long-term growth
- Consider adjusting based on your risk tolerance and time horizon
Why consider inflation in retirement planning?
Inflation significantly impacts long-term retirement planning:
- Reduces purchasing power of your savings over time
- Historically averages around 3% annually
- Can substantially affect required savings goals
- Important for realistic retirement projections