Retirement Calculator: Free Estimate of How Much You Need

Our free calculator estimates your retirement nest egg based on your current retirement savings contributions and then calculates how it will stretch over your retirement in today’s dollars, taking inflation into account.

Filling out the visible fields with your best estimate is enough to get a rough idea of where you stand. For a more accurate number, you can expand the “advanced details” to enter more information about your plans for retirement. Read more about these fields and the information you’ll want to provide below.

Annual pretax income: This is the total income you earn before taxes are deducted. Include your salary, business earnings and any other regular sources of income.

Current retirement savings: Enter the total current balances of all your retirement savings accounts, including 401(k) plans, individual retirement accounts (IRAs) and any other accounts earmarked for retirement.

Monthly contribution: This is the amount you save for retirement each month. Include contributions to your 401(k) (including your employer match), IRA and any other retirement accounts. Experts recommend saving 10% to 15% of your pretax income for retirement. When you enter a number in the monthly contribution field, the calculator will automatically translate that to a percentage of your income and display that figure below this field.

Other retirement income: This is an optional field where you can enter any additional retirement income you expect to receive. This might include Social Security, pension benefits or other passive income you plan to earn in retirement. Use our Social Security calculator to estimate your future Social Security benefits.

Retirement age: Enter the age you plan to retire. Age 67 is considered full retirement age (when you get your full Social Security benefits) for people born in 1960 or later.

Life expectancy: This is how long you expect to live. You’ll want your retirement savings and income to last throughout your life, so it’s a good idea to aim high here. We are using 95 as our default life expectancy, which is a conservative estimate that assumes a longer life span.

Pre-retirement rate of return: This is the rate of return you expect your investments to earn between now and retirement. Our default of a 6% average annual return is a conservative estimate based on historic stock market returns, which average 10%.

Post-retirement rate of return: Your rate of return during retirement is typically lower than pre-retirement because most people shift at least some of their portfolio to lower-risk investments.

Inflation rate: We have assumed an inflation rate of 3%. You can adjust this to see how inflation could affect your retirement savings.

Annual income increase: We assume a 2% annual salary increase when averaged out over the rest of your working years. You can change this if you expect your income to increase more or less than that.

To come up with our estimate of the total amount of savings you’ll have for retirement (“What you’ll have”), we start with your current age and how much you’ve saved so far. Using your income and savings contributions, we calculate how much more you’ll save between now and your projected retirement date. We take salary increases, compound interest and rates of return into account when arriving at the total number.

To calculate your target retirement savings total (“What you’ll need”), we use your life expectancy to determine how much you’ll need (taking inflation into account) to match your projected monthly budget in retirement and have it last from retirement through the remainder of your life.

Our default assumptions include:

• Retirement age of 67 (when most people will receive full Social Security benefits).

• A 6% rate of return before retirement and a 5% rate of return during retirement (assuming a more conservative portfolio).

• A 3% average annual inflation rate.

• Salary increases of 2% per year.

You may change any of these default numbers by selecting “advanced details” to reveal them.

Here are some ways to increase your retirement savings — whether you’re behind on your goals or are on track but maybe want to retire a little earlier.

An IRA is one of the most popular ways to save for retirement given its large tax advantages. You can put in up to $6,500 a year in 2023. And if you’re 50 or older, you can contribute an additional $1,000 a year.

The annual limit for 401(k) contributions is $22,500 in 2023 (or $30,000 for those 50 or older). It’s wise to at least contribute up to the point where you’re getting all of the matching dollars your employer might offer.

A good advisor can help you understand complex issues, diagnose potential problems and take steps to plan for the future. And they’re not as expensive as you might think.

A common guideline is that you should aim to replace 70% of your annual pre-retirement income. This is what the calculator uses as a default. You can replace your pre-retirement income using a combination of savings, investments, Social Security and any other income sources (part-time work, a pension, rental or passive income, etc.).

It’s important to consider how your expenses will change in retirement. Some, such as health care and travel, are likely to increase. But many recurring expenditures could go down: You no longer need to dedicate a portion of your income to saving for retirement. You may have paid off your mortgage and other loans. And your taxes are likely to be lower — payroll taxes, which are taken out of each paycheck, will be eliminated.

Be sure to adjust based on your retirement plans. If you know you won’t have a mortgage, for instance, maybe you plan to replace only 60%. If you want to travel every year, you might aim to replace 100% or even 110% of pre-retirement income.

When trying to calculate how much you need to retire, it’s also essential to factor in inflation. Prices increase over time, and that decreases the purchasing power (value) of your money. This means the amount you have saved today probably won’t go as far 20 to 30 years from now.

We created this retirement calculator with inflation in mind. It includes an assumed 3% average annual inflation rate, so you have a clearer picture of how much you need to save, but you can change this in the “advanced details” if you want to refine your results even further.

401(k): This is a plan for retirement savings that companies offer employees. A 401(k) plan gives employees a tax break on money they contribute. Contributions are automatically withdrawn from employee paychecks and invested.

Compound interest: The interest you earn on your original deposit and on the interest that original deposit earns. For example, a $1,000 investment earning 6% compounded annually could become roughly $4,300 in 25 years.

Contribution limits: The IRS puts limits on the amount of money that can be contributed to 401(k)s and IRAs each year. These limits sometimes change from year to year. Read about the Roth IRA limits and the traditional IRA limits.

Financial advisor: A financial advisor offers consumers help with managing money. Financial advisors can advise clients on making investments, saving for retirement and monitoring spending, among other things. A financial advisor can be a professional or a digital investment management service, called a robo-advisor.

Income: The money you get from working, investing or providing goods or services.

Inflation: This happens when the price of goods and services increases as time passes. The result is a decrease in purchasing power, or the value, of money.

Nest egg: A sum of money you have set aside for the future — in this case, retirement.

Retirement age: The age you retire depends on you. Full Social Security benefits begin at age 67 for people born in 1960 and later. Early retirement benefits are available at 62 but at a lower monthly amount.

Returns: The money you earn or lose on an investment.

Risk: The possibility that an investment will perform poorly or even cause you to lose money. In general, a low-risk investment will deliver lower potential returns. The more risk you’re willing to take on, the more potential upside there is — and the higher the likelihood that you could lose your investment.

Short-term investment: This is an investment that can be easily converted to cash — think a money market account or a high-interest savings account versus stocks or bonds.

Tax-advantaged: When you get tax benefits from an investment account. For example, you can make 401(k) contributions from your paycheck before taxes are taken out. You don’t pay taxes on those contributions, or the earnings, until you withdraw the money. In other accounts, such as Roth IRAs, you pay taxes on your contributions upfront, then you can withdraw those contributions tax-free.

Saving for retirement is definitely a long game, but learning about the process doesn’t have to be.

• Want to learn more about retirement planning? Our retirement planning guide can show you how to get started, how to maximize the returns on your savings and how to prioritize shorter-term goals alongside your retirement targets.

• What are the best retirement plans? NerdWallet’s financial experts break down all your retirement options.

• Wondering how to retire early? Learn how some of these steps to increase your retirement savings could help you toward early retirement.

• Ready to open an IRA? We’ve rounded up the best IRA accounts to simplify your search.