Retirement Income Calculator

Determine how much income your retirement savings can generate and how long your money will last.

Results

Visualization

How It Works

This calculator helps you determine how much annual and monthly income your retirement savings can generate and how long that money will last based on your withdrawal rate, investment returns, and inflation. It's essential for retirement planning because it shows whether your nest egg can sustain your lifestyle throughout retirement or if you need to adjust your savings, spending, or work timeline. This tool is designed for both quick estimates and detailed planning scenarios. Results update instantly as you adjust inputs, making it easy to compare different approaches and understand how each variable affects the outcome. For best accuracy, use precise measurements rather than rough estimates, and consider running multiple scenarios to establish a realistic range of expected results.

The Formula

Annual Income (Year 1) = Retirement Savings × Withdrawal Rate. For subsequent years, the remaining balance is recalculated as: New Balance = (Previous Balance - Annual Withdrawal) × (1 + Annual Return) - Inflation Adjustment, repeated until the balance reaches zero or the retirement period ends.

Variables

S — Retirement Savings — the total amount of money you have saved for retirement (your starting nest egg)
W — Withdrawal Rate (%) — the percentage of your retirement savings you plan to withdraw annually, typically expressed as a decimal (e.g., 4% = 0.04)
R — Annual Return (%) — the expected annual investment return on your remaining retirement balance, accounting for market growth
I — Inflation Rate (%) — the annual increase in cost of living that reduces your purchasing power over time
Y — Years in Retirement — the number of years you expect to spend in retirement (your planning horizon)

Worked Example

Suppose you have $500,000 saved for retirement, plan to withdraw 4% annually, expect your investments to return 6% per year, inflation averages 2.5%, and you expect to be retired for 30 years. In Year 1, your annual income is $500,000 × 0.04 = $20,000, or about $1,667 per month. After withdrawing $20,000, your remaining balance is $480,000. This balance then grows by 6% to $508,800, but inflation erodes its real value by 2.5%, and you'll withdraw another $20,500 in Year 2 (adjusted for inflation). The calculator continues this process year by year, showing you the annual withdrawal amount, total amount withdrawn over 30 years, and your remaining balance at retirement's end. If the balance reaches zero before 30 years, you've run out of money; if it's positive, you've successfully maintained your nest egg.

Practical Tips

The 4% rule is a widely-used starting point: withdraw 4% of your initial retirement balance in Year 1, then adjust that dollar amount upward for inflation each subsequent year. This historically has provided a high probability of not outliving your money over a 30-year retirement.
Be conservative with your expected annual return assumption—use 5-6% for a balanced portfolio rather than assuming historical stock market returns of 10%, which can lead to overestimating your income.
Account for inflation explicitly by using a realistic inflation rate (2-3% is typical). Ignoring inflation can make your retirement plan appear sustainable when it actually isn't, because your purchasing power declines over time.
Run multiple scenarios with different withdrawal rates and return assumptions to understand your margin of safety. Test what happens if markets underperform or you live longer than expected.
If the calculator shows you'll run out of money, consider increasing savings now, working longer, reducing your planned retirement spending, or adjusting your investment strategy to potentially earn higher returns.

Frequently Asked Questions

What withdrawal rate should I use in retirement?

The most commonly cited safe withdrawal rate is 4%, meaning you withdraw 4% of your initial nest egg in Year 1 and adjust that amount upward for inflation each year. Some retirees use 3-3.5% for extra safety or longer retirements (40+ years), while others use 5% if they're comfortable with higher risk of running out of money. Your ideal rate depends on your retirement length, risk tolerance, and flexibility to reduce spending if markets perform poorly.

How does inflation affect my retirement income?

Inflation erodes the purchasing power of your money over time, meaning the same dollar amount buys less in the future. If you withdraw the same dollar amount each year without adjustment, your actual standard of living drops significantly. This calculator accounts for inflation by showing how your real income needs to grow to maintain your lifestyle, which is why the withdrawal amount typically increases each year.

What happens if my investments earn less than I expected?

If your actual investment returns fall short of your assumptions, your retirement balance declines faster, potentially running out of money sooner than planned. This is why it's important to be conservative in your return assumptions and to regularly review your plan. If markets underperform early in retirement (called 'sequence of returns risk'), the impact is especially significant because you're withdrawing from a smaller balance.

How long will my retirement savings actually last?

The calculator shows you the remaining balance at the end of your retirement period. If the balance is zero or negative, your money runs out before your planned retirement ends. However, don't forget about Social Security, pensions, or other income sources—this calculator typically models just your investment portfolio, not all retirement income combined.

Should I include Social Security in this calculation?

This calculator focuses on your savings and investment withdrawals. You should calculate your expected Social Security benefits separately (using the Social Security Administration's tools) and add that to the income this calculator shows. Social Security provides a foundation of guaranteed income, so your retirement savings withdrawal rate can often be lower since your basic living expenses are partially covered by benefits.

Sources

Social Security Administration: Retirement Estimator
IRS Publication 590-B: Distributions from Individual Retirement Arrangements
SEC Office of Investor Education: Planning for Retirement
Vanguard: The Global Case for Strategic Asset Allocation
CFP Board: Retirement Income Planning Resources

Last updated: April 02, 2026 · Reviewed by the CalcSuite Editorial Team · About our methodology