Retirement Calculator

The 4% Rule (Trinity Study): You can withdraw 4% of your portfolio each year in retirement and it'll last 30+ years historically. Nest egg needed = Annual expenses × 25. Example: $60,000/year expenses → need $1,500,000. More conservative: 3.5% rule → $60k × 28.6 = $1,714,286. Factors that affect the number: investment allocation (stock/bond mix), sequence-of-returns risk (bad early returns devastate portfolios), inflation, healthcare costs (often underestimated), Social Security income (reduces required savings), legacy goals.

FIRE (Financial Independence, Retire Early): a movement of saving aggressively (40–70%+ of income) to retire decades before traditional retirement age. Types: Fat FIRE: high expenses, large portfolio (~$3M+). Lean FIRE: minimal expenses, smaller portfolio ($500K–$1M). Barista FIRE: semi-retire, supplement with part-time income. Coast FIRE: save enough early so compound interest does the rest without further contributions. The 4% rule is central to FIRE. A 25-year-old who saves $500k has ~45 years of compounding — even without contributions, that could grow to $7M+ by 65 at 7% real return.

2024 contribution limits: 401k: $23,000/year ($30,500 if 50+). IRA: $7,000/year ($8,000 if 50+). HSA: $4,150 single / $8,300 family. Priority: 1. Always capture employer 401k match first (100% return). 2. Max HSA if eligible (triple tax advantage). 3. Max IRA (Roth for lower earners, traditional for higher). 4. Max 401k beyond match. 5. Taxable accounts. Traditional 401k: pre-tax contributions, taxable withdrawals. Roth 401k: after-tax contributions, tax-free withdrawals. Rule of thumb: save 15% of gross income for retirement (including employer match).

Historical US stock market (S&P 500): nominal return ~10% annualized (1926–2023). Real return (inflation-adjusted): ~7% annually. Bond return: ~3–5% nominal, ~1–3% real. Balanced 60/40 portfolio: ~7–8% nominal, ~5% real. Important caveats: past performance doesn't guarantee future results. Sequence of returns matters: retiring into a bear market is dangerous. Diversification across US/international reduces volatility. Tax drag from taxable accounts reduces returns. Use 6–7% as a conservative projection for planning, not 10%.

Social Security: US government retirement benefit funded by payroll taxes (FICA: 6.2% employee + 6.2% employer). Eligibility: 10 years of work credits minimum. Full retirement age (FRA): born 1960+: age 67. Early claiming at 62: reduces benefit by ~30%. Delayed claiming to 70: increases benefit by 8%/year beyond FRA. Average monthly benefit (2024): ~$1,900. Maximum at FRA: ~$3,800/month. Strategy: if you expect to live long (75+), delaying to 70 maximizes lifetime benefits. Create a mySocialSecurity account to see your estimated benefits based on actual earnings history.