How the calculator works

The verdict

• On track: the money lasts with steady returns, and in at least 85% of market scenarios.
• Tight: it lasts with steady returns, but only in 60 to 85% of scenarios. ("Spend it all" plans are never better than tight: they have no margin by design.)
• Off track: the money runs out even with steady returns, or in more than 40% of scenarios.

Before you retire

Your savings earn the annual return you entered, minus fees. With monthly compounding, the annual rate is turned into the equivalent monthly rate, (1 + r)^1/12 − 1, and your contribution is added at the end of each month. If you keep "raise contributions with inflation" on, the monthly contribution goes up by the inflation rate every year. In "Income − spending" mode, your contribution is your take-home income minus what you spend today.

After you retire

Spending starts in the year you reach your retirement age and rises with inflation every year, so your spending power stays the same.

• Fixed amount: you choose the monthly spending. If it's in today's money, it's raised by inflation until you retire.
• % of savings: the first year's withdrawal is that percentage of your savings at retirement, then it rises with inflation (the "4% rule" approach).
• Spend it all: we solve for the highest starting spending that brings your savings to exactly zero at the end age.
• Spending later in retirement: from the age you choose, spending changes by the percentage you set, on top of inflation.
• Tax: one average rate on what you take out of savings. To spend 100 at 20% tax, 125 comes out.

Income, partners and one-off amounts

Each income (a pension, Social Security, part-time work, rent) is entered in today's money, rises with inflation and runs from its start age until its end age, if it has one. It pays part of your spending, so less comes out of your savings; any surplus is invested. With a partner, enter your savings together; a partner's income can use their ages, and the money has to last until the younger of you reaches the end age. One-off amounts (an inheritance, a house sale, a big purchase) are in today's money and happen at the start of that year.

Key results

• Needed at retirement: the exact amount that funds your planned spending until the end age with steady returns.
• Initial withdrawal rate: what comes out of your savings in the first year (spending minus other income, plus tax) divided by your savings at retirement.
• Coast FIRE number: the savings you'd need today to stop contributing and still reach the amount needed at retirement through growth alone.
• Earliest retirement age: the first age at which your planned spending lasts until the end age with steady returns.
• Today's money: future amounts divided by (1 + inflation)^years, so you can compare them with prices today.

Market scenarios

Real markets don't deliver the same return every year, and a few bad years just after you retire hurt the most. So we replay your plan 1,000 times with a different return each year, drawn from a log-normal distribution whose median is your return after fees. The yearly swing depends on your investment mix: about 7% for mostly bonds, 12% for balanced, 16% for mostly stocks. Inflation also drifts around your assumption from year to year, with some memory, so a run of high-inflation years is possible. The shaded range on the chart holds the middle half of the scenarios (25th to 75th percentile). The random numbers use a fixed seed, so the same inputs always give the same result.

Real market history

We also start your plan in every year from 1871 that leaves enough history to finish it, and use what actually happened each year: the after-inflation total return of US stocks (S&P composite with dividends) and of 10-year US government bonds, from Robert Shiller's data, mixed in your stock/bond proportion and minus your fees. Your own return assumption is not used here, so this is an independent check on it.

Flexible spending

If you switch it on, in any year of retirement when your savings are 20% or more below where the steady projection expected them, you spend less that year by the percentage you choose. It applies to the market scenarios and the historical test, where markets actually misbehave.

What it doesn't model

Detailed tax rules by account type or country, pension rules, and the US market being a single, fortunate market. Scenarios and history are illustrations, not forecasts. This is an educational tool, not financial advice.