Home
Back
Projected Retirement Income Formula:
| From: | To: |
The Projected Retirement Income Calculator estimates future retirement income based on current savings, withdrawal rate, investment growth, and time horizon. It helps individuals plan for retirement by projecting how their savings will generate income over time.
The calculator uses the retirement income formula:
Where:
Explanation: The formula calculates how current savings will grow over time and what sustainable income they can generate based on a specified withdrawal rate.
Details: Proper retirement planning ensures financial security in later years, helps determine adequate savings rates, and guides investment strategies to meet retirement income goals.
Tips: Enter current savings in currency, withdrawal rate as decimal (e.g., 0.04 for 4%), growth rate as decimal (e.g., 0.06 for 6%), and number of years until retirement. All values must be positive.
Q1: What is a safe withdrawal rate for retirement?
A: The 4% rule is commonly used, but individual circumstances vary. Conservative rates of 3-4% are often recommended for long-term sustainability.
Q2: How accurate are these projections?
A: Projections are estimates based on constant growth rates. Actual market performance may vary, so regular reassessment is recommended.
Q3: Should inflation be considered?
A: Yes, the growth rate should typically be a real return (after inflation) for accurate purchasing power projections.
Q4: What if I have multiple income sources?
A: This calculator focuses on investment-generated income. Other sources like Social Security or pensions should be calculated separately and added to total retirement income.
Q5: How often should I update my retirement projections?
A: Annually or whenever significant changes occur in savings, investment strategy, or retirement timeline.