Retirement Calculator
The pot at retirement in money and in today's money, and the income it supports across a range of withdrawal rates rather than at four percent.
Pot now £85,000.00
Contributions £650.00 a month, rising 2% a year
Years to retirement 25
Growth assumed 5.5% a year
At retirement
pot £840,944.84
paid in £334,836.34
growth £506,108.50, 60.2% of the pot
in today's money £421,637.90 at 2.8% inflation
inflation takes £419,306.94 of purchasing power
real growth rate 2.63% a year, which is the ratio rather than the difference
Income it supports
at 3.5% £29,433.07 a year, £2,452.76 a month
in today's money £14,757.33 a year, £1,229.78 a month
plus a state pension £11,500.00 a year in today's money
total in today's money £26,257.33
At other withdrawal rates
how long it lasts assumes a steady 2.63% real return every year, which no market provides: a poor first decade shortens every figure below
3% £12,649.14 a year in today's money, and the pot lasts 74 years
3.5% £14,757.33 a year in today's money, and the pot lasts 51 years ← yours
4% £16,865.52 a year in today's money, and the pot lasts 40 years
5% £21,081.90 a year in today's money, and the pot lasts 28 years
Against the income you want
target income £32,000.00 a year in today's money
pot needed, in today's money £914,285.71 at 3.5%
which at retirement is £1,823,516.93
you are on track for £840,944.84
short by £982,572.09
contribution that would get there £1,931.62 a month
If growth is different
at 3% £539,967.58, £270,732.14 in today's money
at 5% £767,349.97, £384,738.47 in today's money
at 7% £1,115,917.55, £559,505.35 in today's money
The pot reaches £840,944.84, which buys what £421,637.90 buys today.
Quoting a retirement pot in future money is how a plan ends up out by a
factor of two or three, and the 2.8% assumed here is doing most of that
work over 25 years.
The four percent rule comes from Bengen's 1994 study of US market
history over thirty year retirements. It is a historical finding rather
than a law, later work on wider data and longer retirements has argued
for three to three and a half percent, and the table above is there
because the choice of rate matters more than most of the other
assumptions.
Sequence of returns is the risk the arithmetic cannot show. A poor
decade at the start of retirement does far more damage than the same
decade later, because the early withdrawals come out of a smaller pot
and never recover. Averages hide this entirely.
A growth assumption is doing more work than any other number here. Two
points of difference over thirty years roughly doubles the pot, which is
why the range matters more than the point estimate and why nobody should
plan on the top of it.
Contributions early in the term do most of the compounding. The same
money paid in ten years earlier is worth much more at retirement, which
is the whole argument for starting before it feels affordable.
Tax, fees and employer contributions all change these numbers materially
and none of them are here. A one percent annual fee over forty years
costs a substantial share of the final pot, and an employer match is the
highest-return contribution available to anybody.
This is arithmetic, not advice, and retirement is the area where that
distinction matters most. Anything that depends on this should be
checked by somebody qualified and regulated to give the advice.
Output is valid and updates as you type.
Fix the highlighted fields to update the output.
Retirement is two calculations, and only the first one is usually done honestly.
Building the pot is compound interest and every calculator agrees. Living off it is the hard half, and the number there is not a rate of return: it is how much can be taken out each year without the pot running out before you do.
The four percent rule comes from Bengen’s 1994 study of US market history over thirty year retirements. It is a historical finding rather than a law, later work on wider data and longer retirements has argued for three to three and a half percent, and the difference is the difference between comfortable and short. So the income is printed across a range of rates rather than at one.
Everything is also printed in today’s money. A pot 25 years away is quoted in units that buy half what they buy now: £840,945 becomes £421,638, and a plan that misses this is out by a factor of two.
How to use
- Put in the pot now, the monthly contribution, and how much it rises each year.
- Put in the growth and inflation assumptions. Growth does more work here than anything else.
- Set the withdrawal rate and the income you want, in today’s money, to see the gap.
Example
£85,000 now, £650 a month rising 2 percent a year, 5.5 percent growth, 25 years, 2.8 percent inflation:
At retirement
pot £840,944.84
paid in £334,836.34
growth £506,108.50, 60.2% of the pot
in today's money £421,637.90 at 2.8% inflation
real growth rate 2.63% a year, which is the ratio rather than the difference
Income it supports
at 3.5% £29,433.07 a year, £2,452.76 a month
in today's money £14,757.33 a year, £1,229.78 a month
plus a state pension £11,500.00 a year in today's money
total in today's money £26,257.33
At other withdrawal rates
how long it lasts assumes a steady 2.63% real return every year, which no market provides
3% £12,649.14 a year in today's money, and the pot lasts 74 years
3.5% £14,757.33 a year in today's money, and the pot lasts 51 years ← yours
4% £16,865.52 a year in today's money, and the pot lasts 40 years
5% £21,081.90 a year in today's money, and the pot lasts 28 years
Against the income you want
target income £32,000.00 a year in today's money
pot needed, in today's money £914,285.71 at 3.5%
which at retirement is £1,823,516.93
you are on track for £840,944.84
short by £982,572.09
contribution that would get there £1,931.62 a month
If growth is different
at 3% £539,967.58, £270,732.14 in today's money
at 7% £1,115,917.55, £559,505.35 in today's moneyA £840,945 pot sounds like enough and supports £26,257 a year in today’s money including the state pension. That is the whole reason to do this in real terms.
Pitfalls
A future pot in future money means nothing. Always read the today’s-money figure. Over 25 years at 2.8 percent inflation it is half the headline, and over 40 years it is a third.
The four percent rule is one country’s history. Thirty year retirements, a balanced portfolio, and a period that included exceptional returns. Three to three and a half percent is the more defensible planning figure, and this tool shows both.
Sequence of returns is the risk no arithmetic here can show. A poor first decade of retirement does far more damage than the same decade later, because early withdrawals come out of a smaller pot and never recover. The depletion years above assume a steady real return, which no market provides.
The growth assumption is doing most of the work. Two points over 25 years changes the pot by a factor of two. Plan at the low end of a range and treat anything better as a bonus.
Fees compound too. A one percent annual charge over decades costs a substantial share of the final pot, and it is invisible in a growth assumption that was quoted gross.
Early contributions do the compounding. The same money paid in ten years earlier is worth far more at retirement, which is the whole argument for starting before it feels affordable.
An employer match is the highest return available. Nothing in a fund selection competes with money somebody else adds.
Compatibility
Arithmetic in the browser: nothing is uploaded and nothing is stored.
Accumulation runs month by month with the contribution rising annually, rather than using a closed-form annuity formula, so a rising contribution is modelled exactly rather than approximated. The test suite checks it against plain compound growth with no contributions, and against plain contributions with no growth, which are the two cases with an independent answer.
The real growth rate is the ratio of growth to inflation rather than the difference, and the depletion model withdraws at the start of each year and grows what is left, which is the conservative order.
The required-contribution search steps upwards until the pot covers the target at retirement, and the target itself is entered in today’s money and inflated to compare against the nominal pot, so the two sides of that comparison are in the same units.