A retirement calculator estimates whether your current savings rate will produce enough wealth to sustain your lifestyle after you stop working. The core formula is straightforward: your projected retirement balance needs to be roughly 25 times your annual spending in retirement (the "4% rule"). If you plan to spend $60,000 per year in retirement, you need approximately $1.5 million saved.
The three levers you can adjust are: how much you save each month, how long until you retire, and what return your investments earn. Of these, time is the most powerful. A 30-year-old saving $500/month at 7% return reaches $567,000 by age 60. A 25-year-old with the same contribution reaches $810,000 — $243,000 more from just five additional years of compounding.
Fidelity's widely cited benchmarks suggest saving 1x your salary by 30, 3x by 40, 6x by 50, and 10x by 67. These assume a 15% savings rate (including employer match) starting at age 25. If you're behind these targets, increasing your savings rate by even 1–2% per year can close a significant gap over time. Our retirement savings guide provides personalized targets based on your actual income, age, and retirement goals.
A million dollars today won't have the same purchasing power in 30 years. At 3% annual inflation, $1 million in 2025 buys only about $412,000 worth of goods in 2055. This is why retirement calculators typically use "real" returns (after inflation) of around 4–5% rather than the nominal 7–10% the stock market has historically returned. When this calculator shows a 7% return, the true growth after inflation is closer to 4%. Social Security helps offset this, but benefits alone replace only about 40% of pre-retirement income for average earners.
Where you save affects how much you actually keep. A Traditional 401(k) defers taxes until withdrawal — so your $1 million balance is really $700,000–$800,000 after federal taxes. A Roth IRA or Roth 401(k) is taxed upfront but comes out entirely tax-free. The ideal strategy for most people is a mix: contribute enough to your Traditional 401(k) to capture the full employer match, then max out a Roth IRA ($7,000/year in 2025), then return to the 401(k) for additional contributions. See our Roth IRA vs. 401(k) deep dive for the full framework.
Take the next step: Our FIRE & early retirement guide explores strategies for retiring before 65. And our turning 65 checklist covers Medicare, Social Security timing, and Required Minimum Distributions.