The single most important variable in any retirement projection isn't your savings rate — it's your assumed investment return. A one-percentage-point difference in annual return can mean hundreds of thousands of dollars over a 30-year horizon. This planner shows your projected portfolio at retirement, how long it lasts, and what happens when you adjust the return assumption. All spending and income are adjusted for inflation every year — starting today — so the projection stays realistic.
Retirement Planning
Retirement Savings Planner: Will Your Money Last?
Why Pre-Retirement Expenses Matter
Your savings rate is the gap between what you earn and what you spend before retirement. If you earn $8,000/month and spend $6,500, you have $1,500 to invest — roughly an 18.75% savings rate. Knowing this gap helps you stress-test whether your contribution target is achievable, and whether cutting expenses (rather than increasing income) might get you to retirement faster.
Why Investment Return Assumptions Matter So Much
Over 20 years, $1,000/month invested at 5% grows to about $411,000. At 7%, the same contributions grow to $520,000 — a $109,000 difference from a single percentage point. At 9%, you reach $671,000. The compounding effect makes the return assumption the most powerful lever in the entire model.
Return assumption guidelines:
- Nominal return — what the market actually pays. Historically ~10% for the S&P 500 over long periods. Common planning assumptions: 7–8% for a diversified portfolio.
- Real return (after inflation) — subtract ~3% for inflation. Use 4–5% if you want results in today's purchasing power. This is the more conservative and often recommended approach for retirement planning.
- Retirement phase — many advisors use a lower return (5–6%) once you're in retirement, reflecting a more conservative allocation to reduce sequence-of-returns risk.
Inflation Erodes Purchasing Power — Plan for It
At 3% annual inflation, $4,000/month today becomes $5,375/month in 10 years and $7,224/month in 20 years. If your portfolio withdrawal stays flat at $4,000 while prices rise, you're effectively getting poorer every year. This planner applies inflation to your retirement spending each year, giving you a realistic picture of how much your portfolio actually needs to sustain.
The 4% Rule — A Simple Benchmark
The 4% rule states that you can withdraw 4% of your portfolio in the first year of retirement (adjusted for inflation each year after) with a historically high probability of not running out of money over 30 years. Divide your annual spending need by 0.04 to get your target retirement number. If you need $48,000/year net of Social Security, you need $1.2 million saved.
It's a rule of thumb, not a guarantee — low return environments, longer life expectancies, or higher spending can break it. A full retirement plan accounts for your specific situation. NestBridge runs a Monte Carlo simulation to show your probability of success across thousands of market scenarios.
Frequently Asked Questions
How much money do I need to retire?
A common benchmark is 25× your annual spending (the 4% rule). If you need $48,000/year net of Social Security, you need roughly $1.2 million saved. Your actual number depends on spending, life expectancy, Social Security income, and return assumptions — use this planner to find your specific target.
What investment return assumption should I use?
For a diversified portfolio, common planning assumptions are 7–8% nominal (before inflation) or 4–5% real (after inflation). This planner applies inflation separately, so use a nominal return — 7% is a common moderate assumption for a balanced portfolio.
How does inflation affect my retirement projections?
At 3% inflation, $4,000/month today becomes $5,375/month in 10 years and $7,224/month in 20 years. This planner inflates both spending and income from today forward — so you see what your portfolio actually needs to sustain your lifestyle, not just today's dollars.
What happens if my portfolio runs out before I die?
You'd rely entirely on Social Security, pensions, or other guaranteed income. To reduce this risk: increase contributions, delay retirement, reduce spending, delay Social Security to maximize your guaranteed monthly benefit, or consider a partial annuity for baseline income security.
Does this calculator account for taxes on withdrawals?
No — this planner uses gross withdrawals and does not model income taxes on 401(k)/IRA distributions or Social Security taxation. For a tax-aware projection, NestBridge models your after-tax cash flow across your full retirement timeline.