Retirement Calculator

Notes & Definitions

1. Everything is in today's dollars. Enter what things cost and what you hold now. The calculator does the inflating and compounding for you: spending grows at your inflation rate every year, balances grow at your expected return up to your retirement date, and income sources marked "rises with inflation" receive a cost-of-living increase each year exactly as Social Security does. Greyed reference lines show the same figures restated in future dollars so you can sanity-check them. back
2. Sizing the care reserve. Enter it in today's dollars; the calculator restates it for your retirement date. 2025 national median annual costs (CareScout/Genworth): nursing home private room about $129,600, semi-private $115,000, assisted living $74,400, in-home aide $80,100. About 7 in 10 people turning 65 need some long-term care, though only about half ever need paid care (HHS/ASPE). Two to three years of paid care is a common planning assumption. Costs vary widely by state, and households with long-term care insurance often enter less. back
3. Sizing the legacy fund. Which account it sits in matters as much as the amount. A legacy in a taxable account generally passes with a stepped-up cost basis; one in a pre-tax IRA generally must be emptied by most non-spouse heirs within 10 years, often during their peak earning years. A home may already cover part of the wish. back
4. Why the larger, not the sum. If you never need paid care, the care reserve becomes the inheritance. If you do, it does not. Reserving both in full assumes you fund a complete care event and leave the legacy intact. Unticking the box raises your reserve to the sum and reduces the surplus accordingly. back
5. Social Security entries. Set "Starts at age" to the age you will claim, and enter the benefit for that age - a statement's headline figure is your benefit at full retirement age. Delaying past that adds roughly 8% a year to age 70; claiming at 62 cuts it about 30%. The calculator does not adjust the amount for claim age, but it does hold the income back until the age you set, so any bridge years before it starts are funded from your portfolio. Mark Social Security "rises with inflation" - it has had a cost-of-living adjustment nearly every year since 1975. Fewer than one private-sector pension in ten has one, while most state and local government plans do. Leave "Starts at age" blank or 0 for anything that begins the day you retire. Taxability runs on "provisional income" (adjusted gross income + tax-exempt interest + half your Social Security): for joint filers none is taxable below $32,000, up to 50% to $44,000, up to 85% above (single: $25,000 and $34,000). Those thresholds are not indexed - the 50% tier dates from 1984, the 85% tier was enacted in 1993 and took effect in 1994. Most states do not tax Social Security, but this calculator applies whatever state rate you enter to all taxable income, so enter 0 if your state exempts it. back
6. Entering assets. Use your balances as they are today, excluding the future saving entered earlier - that is added on its own row. Each balance is grown to your retirement date at your expected return. Category decides whether an asset can fund spending; tax treatment decides what it costs to withdraw. Non-liquid assets are listed then excluded from the withdrawal base, because you cannot spend a home without selling or borrowing. back
7. Filing status and the survivor. When one spouse dies the household keeps only the larger Social Security benefit and the survivor files as single - roughly half the standard deduction, with the 22% rate starting at about half the income - while spending typically falls only 20 to 30%. This model does not simulate it. The main thing you can change is claim timing: the larger benefit is the one the survivor keeps for life. back
8. What this model does and does not do. It does adjust for inflation throughout. It does not model market sequence, required minimum distributions, Medicare premiums or IRMAA, the survivor's tax position, pre-65 health care, the 10% penalty on pre-tax withdrawals before age 59 and a half, asset allocation, withdrawal order across accounts, state estate taxes, or debts. Spending grows at full inflation for the whole horizon, which is the conservative end. back
9. Read the surplus as a floor. The plan includes several margins of safety: it runs to your plan-to age (only about one couple in five has a survivor to 95), grows spending at full inflation, and holds your reserve outside the tested money. A number near zero is a conservatively funded plan with little margin, not a crisis. back
10. Implied withdrawal rate. Gross withdrawal divided by your spendable portfolio - what your plan actually implies, not the rule-of-thumb figure you can set below. A rate above your real return draws on principal by design, which is reasonable over a fixed horizon but leaves less room for a bad decade. The 4% rule comes from Bengen (1994) and the Trinity study (1998) and assumed a 30-year horizon. back
11. Years of care. The $129,600 median is a 2025 figure, but a care event in your eighties is decades away, so this row inflates the cost to age 85 at your assumed inflation rate and grows your reserve to the same age at your expected return - the reserve is set aside but stays invested, so it keeps earning until it is needed. Care costs have historically risen faster than general inflation, so treat the figure as optimistic. back
12. Why the rate is below your bracket. Your bracket applies only to income left after deductions; this calculator applies your rate to income before them. Deductions shield a large slice entirely, and most of what remains is taxed at 10%, so the average lands well under the bracket. The panel beneath the field shows the full arithmetic. Use the marginal rate instead when sizing a one-off withdrawal or a Roth conversion. back
13. Profit share of your brokerage account. When you sell an investment you only pay capital gains tax on the profit, not on the money you originally invested. So if you sell $10,000 of a fund and half of it is growth, only $5,000 is taxed. This field asks roughly what share of your taxable brokerage balance is that growth. You do not need to be precise, and it does not apply to retirement accounts at all. Rough guide: an account opened in the last few years, 20-30%; one held a decade or more through a rising market, 50-70%. If you are unsure, 50% is a fair middle and the answer rarely moves the result much. Your brokerage statement may show it as "unrealized gain" or "total gain/loss". back
14. One-time / upfront expenses. Enter each in today's dollars and the age it occurs; the calculator grows it to that year at your inflation rate. A cost before retirement is taken from the savings you would otherwise carry in, and its future growth is lost too; a cost during retirement is funded as an extra withdrawal that year, grossed up for tax at your blended rate. A very large single-year cost pulled from pre-tax accounts is therefore taxed a little lightly here, because in reality it would push you into higher brackets for that one year. These are separate from your annual spending and from your care and legacy reserves. back
15. Spending change in later years. Research on real retirement spending (the "retirement spending smile") finds that inflation-adjusted spending tends to drift down through the active early years, then rise again late in life as health costs grow. This one setting lets you model that as a single step: from the age you choose, your annual spending becomes the percentage you enter of the base above, held in today's-dollar terms for the rest of the plan. It changes only the years from that age on. back
16. Estimated estate value. A rough figure, in today's dollars, for what would pass to your heirs at your plan-to age: any portfolio left after your last planned withdrawal, plus the care and legacy reserves you never spent (grown at your expected return), plus your home and other non-liquid assets (grown at inflation). It is before any income tax an heir would owe on inherited pre-tax accounts, and before any estate or inheritance tax. back
17. How much you need now to retire. The single lump sum that, invested today at your expected return, would grow to the portfolio you need by your retirement date - your target if you added nothing further. Because you are also still saving, the amount you must set aside from here is smaller. Shown in today's dollars. back
18. How your tax rate was worked out. The full breakdown behind the federal rate the calculator filled in for you, from your ordinary income down to the average rate it applies.
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