After decades of saving, retirement flips the equation—now you need to turn your nest egg into reliable income. This calculator helps you estimate how much income your savings can provide and whether it will meet your needs.
How This Calculator Works
This calculator estimates your retirement income:
- Retirement Savings: Total accumulated across all accounts
- Social Security: Expected monthly benefit
- Pension: If applicable, monthly pension income
- Withdrawal Rate: Percentage of savings taken annually
- Investment Return: Expected portfolio growth
- Total Monthly Income: All sources combined
The Formula Explained
Annual Portfolio Income = Savings × Withdrawal Rate
Total Annual Income = Portfolio Income + Social Security + Pension + Other
Monthly Income = Total Annual Income / 12
Example: $800,000 × 4% = $32,000/year from portfolio, plus $24,000 SS = $56,000/year or $4,667/month.
Step-by-Step Example
Retirement Income Analysis
| Income Source | Monthly | Annual |
| 401(k) at 4% withdrawal | $1,500 | $18,000 |
| IRA at 4% withdrawal | $833 | $10,000 |
| Social Security | $2,200 | $26,400 |
| Part-time work | $1,000 | $12,000 |
| Total Income | $5,533 | $66,400 |
This retiree has $5,533/month from portfolio and other sources.
Frequently Asked Questions
How much retirement income do I need?
Common guidelines suggest 70-80% of pre-retirement income, but this varies widely. Some retirees spend less (mortgage paid off, no commute, lower taxes). Others spend more initially (travel, hobbies). Calculate your actual expected expenses rather than relying on percentages.
What is a safe withdrawal rate?
The famous 4% Rule suggests withdrawing 4% of your portfolio in year one, then adjusting for inflation annually. This has historically provided 90-95% success over 30-year periods. Some advisors now recommend 3-3.5% for added safety. Flexibility in spending significantly improves outcomes.
How do I maximize Social Security income?
Delay claiming until age 70 if possible—benefits increase 8% per year between full retirement age and 70. For a higher-earning spouse, this can add hundreds of dollars monthly for life. Lower-earning spouses may claim earlier. Spousal and survivor benefits add complexity worth professional review.
Should I combine savings or keep accounts separate?
Think of all retirement accounts as one portfolio. Your 401(k), IRA, taxable accounts, and spouse's accounts work together. Strategically withdraw from different accounts to minimize taxes—typically: taxable first, then tax-deferred, then Roth last (for tax-free growth).
How do I handle sequence of returns risk?
Bad returns early in retirement can devastate your portfolio. Mitigate with: (1) 2-3 years cash/bonds for near-term spending, (2) Flexible withdrawal strategy—reduce spending in down markets, (3) Diversification across asset classes, (4) Part-time income in early years.
What about required minimum distributions (RMDs)?
At age 73, you must withdraw minimum amounts from traditional IRAs and 401(k)s. RMDs start at ~3.8% and increase with age. Plan for these—they're taxable income. Consider Roth conversions before RMDs begin to reduce future mandatory withdrawals.
How does inflation affect retirement income?
Inflation erodes purchasing power over 20-30 year retirements. At 3% inflation, $5,000/month today needs to be $9,000/month in 20 years for equivalent purchasing power. Social Security adjusts for inflation (COLA); portfolio income needs growth to keep pace.
Can I retire early with enough income?
Early retirement requires larger savings because: (1) More years to fund, (2) No Social Security yet, (3) No Medicare until 65. The FIRE movement uses 25× annual expenses (4% rule) or more conservative 33× (3% rule) as targets. Healthcare costs before 65 are a major consideration.
Key Points to Remember
- Multiple income streams: Portfolio + Social Security + pension + part-time work
- 4% is a guideline: Adjust based on market conditions and flexibility
- Delay Social Security if possible: 8% guaranteed annual increase
- Plan for inflation: Income needs grow over 20-30 year retirements
- Flexibility matters: Ability to reduce spending in bad years helps sustainability