Retirement calculator

Traditional 401(k)/IRA contributions are tax-deferred: you don't pay tax now, but you pay ordinary income tax on withdrawals in retirement. Roth contributions are taxed now but withdrawals are tax-free. If you expect higher tax rates later, Roth wins. If you expect lower rates in retirement, traditional wins. Most people do traditional and some Roth for diversification.

At age 50, IRS allows extra "catch-up" contributions to retirement accounts. For 2024: 401(k) limit is $23,000, plus $7,500 catch-up = $30,500 total. IRA limit is $7,000, plus $1,000 catch-up = $8,000. Use it if you can—these are your highest-earning years and your last chance to maximize compounding before retirement.

A market crash early in retirement (when you're withdrawing) can deplete your portfolio faster than a crash during your working years (when you're contributing). This is why many people shift to more conservative allocations (bonds, cash) as they near retirement. You can't control market returns, but you can control your exposure.

Average Social Security benefit in 2024 is about $1,900/month ($23,000/year). Maximum is about $3,800/month if you maxed out contributions and delayed until 70. For most people, Social Security covers 30–40% of retirement income needs. You need savings to fill the gap.

A common rule: save 15% of gross income annually, starting in your 20s or 30s. If you start later, save more. Use the calculator to model different contribution levels and see what gets you to your goal.

Historically, diversified stock portfolios average 7–10% before inflation, about 7% real. As you near retirement, you'll likely shift to bonds (4–5%) and cash. A 6–7% blended return over 30–40 years is a reasonable planning assumption.

Pay off high-interest debt first (credit cards, personal loans >7%). For low-interest debt (mortgage <4%), contribute to retirement—especially if there's an employer match. The match and compound growth often beat paying off cheap debt early.

When your savings can support your lifestyle. Use the 4% rule as a rough guide: divide your annual spending by 0.04 to estimate the portfolio size you need. $50K/year spending = ~$1.25M needed. Add Social Security and pensions to the income side of the equation.