Can I Retire Now Calculator
Use this calculator to estimate if your current retirement savings are sufficient to cover your desired annual expenses throughout your expected retirement duration, considering investment growth and inflation.
Understanding Your Retirement Readiness
The question "Can I retire now?" is one of the most significant financial queries many individuals face. It's not just about having a large sum of money; it's about ensuring that your savings can sustainably cover your living expenses for the rest of your life, accounting for factors like investment growth, inflation, and other income sources.
How the Calculator Works
This calculator simulates your retirement finances year by year. It takes your current savings, subtracts your net annual expenses (desired expenses minus other income), and then applies your expected investment growth rate to the remaining portfolio. Crucially, it also adjusts your annual expenses upwards each year to account for inflation, reflecting the rising cost of living over time.
Key Inputs Explained:
- Current Retirement Savings: This is the total amount of money you have accumulated specifically for retirement, including 401(k)s, IRAs, brokerage accounts, etc.
- Desired Annual Retirement Expenses: This is how much you anticipate needing to spend each year to maintain your desired lifestyle in retirement. Be realistic and consider all your potential costs, from housing and food to healthcare and leisure.
- Annual Social Security/Pension Income: Any guaranteed income you expect to receive annually from sources like Social Security benefits, pensions, or annuities. This income reduces the amount you need to withdraw from your savings.
- Expected Annual Investment Growth Rate (Post-Retirement): This is the average annual return you expect your investments to generate during your retirement years. A conservative estimate is often recommended, as market returns can be volatile.
- Expected Annual Inflation Rate: The rate at which the cost of goods and services is expected to increase each year. Inflation erodes the purchasing power of your money, meaning you'll need more dollars in the future to buy the same things you buy today.
- Expected Retirement Duration (Years): This is how many years you anticipate being retired. It's often estimated based on life expectancy, but it's wise to err on the side of caution and plan for a longer duration.
Interpreting the Results
The calculator will tell you if your funds are projected to last for your entire desired retirement duration. If they do, it suggests you are in a good position to retire now. If they don't, it will indicate approximately how many years your funds might last, giving you a clearer picture of how much more you might need to save or how you might need to adjust your plans (e.g., reduce expenses, work longer, increase investment returns).
Important Considerations:
- Healthcare Costs: These can be a significant and unpredictable expense in retirement. Ensure your desired annual expenses adequately account for potential medical bills, insurance premiums, and long-term care.
- Market Volatility: Investment returns are not guaranteed and can fluctuate significantly. The calculator uses an average growth rate, but actual returns may vary.
- Unexpected Expenses: Life happens! Account for potential emergencies or large, unforeseen costs.
- Tax Implications: Withdrawals from retirement accounts are often subject to taxes, which can reduce your net income. This calculator does not account for taxes.
- Not Financial Advice: This calculator provides an estimate based on your inputs and general financial principles. It is not a substitute for personalized financial advice from a qualified professional.
Example Scenario:
Let's say you have $1,000,000 in current retirement savings. You desire $60,000 in annual expenses, and expect $20,000 from Social Security. You anticipate a 5% annual investment growth rate and 3% inflation, planning for a 30-year retirement.
Your net annual expenses from savings would initially be $60,000 – $20,000 = $40,000. The calculator would then simulate how your $1,000,000 portfolio holds up, with the $40,000 withdrawal growing by 3% each year, and the remaining portfolio growing by 5%.
In this scenario, the calculator would likely show that your funds are sufficient, as a 5% growth rate generally outpaces a 3% inflation rate, allowing your portfolio to sustain withdrawals over 30 years.
Input Error
Please enter valid positive numbers for all fields. Retirement duration must be at least 1 year.'; return; } var investmentGrowthDecimal = investmentGrowth / 100; var inflationRateDecimal = inflationRate / 100; var netAnnualExpenses = annualExpenses – otherIncome; var portfolioBalance = currentSavings; var yearsFundsLast = 0; var simulationDetails = []; if (netAnnualExpenses <= 0) { // If other income covers all expenses, portfolio will just grow or stay stable resultDiv.innerHTML = 'Retirement Feasibility: Excellent!
Your annual Social Security/pension income of $' + otherIncome.toLocaleString() + ' already covers or exceeds your desired annual expenses of $' + annualExpenses.toLocaleString() + '. Your current savings are projected to last indefinitely and likely grow.'; return; } for (var i = 1; i <= retirementDuration; i++) { // Apply investment growth to the portfolio portfolioBalance = portfolioBalance * (1 + investmentGrowthDecimal); // Withdraw the inflation-adjusted expenses portfolioBalance = portfolioBalance – netAnnualExpenses; simulationDetails.push({ year: i, startBalance: portfolioBalance + netAnnualExpenses, // Balance before withdrawal withdrawal: netAnnualExpenses, endBalance: portfolioBalance }); if (portfolioBalance 0) { finalMessage = 'Retirement Feasibility: Yes, you can retire now!
'; finalMessage += 'Based on your inputs, your current retirement savings of $' + currentSavings.toLocaleString() + ' are projected to last for your entire expected retirement duration of ' + retirementDuration + ' years, with a remaining balance of approximately $' + portfolioBalance.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + '.'; } else { finalMessage = 'Retirement Feasibility: Not yet.
'; finalMessage += 'Based on your inputs, your current retirement savings of $' + currentSavings.toLocaleString() + ' are projected to last approximately ' + yearsFundsLast + ' years. This is less than your desired retirement duration of ' + retirementDuration + ' years.'; finalMessage += 'You may need to consider increasing your savings, reducing your desired annual expenses, working longer, or adjusting your investment strategy.'; } resultDiv.innerHTML = finalMessage; // Optional: Display detailed year-by-year breakdown (can be very long for many years) /* var detailTable = 'Year-by-Year Simulation:
| Year | Start Balance (After Growth) | Withdrawal | End Balance |
|---|---|---|---|
| ' + simulationDetails[j].year + ' | '; detailTable += '$' + simulationDetails[j].startBalance.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' | '; detailTable += '$' + simulationDetails[j].withdrawal.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' | '; detailTable += '$' + simulationDetails[j].endBalance.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' | '; detailTable += '