Retirement readiness is a comparison, not a balance. You need a target, a date, and a savings rate. On track means the projection reaches the target by the age you chose. Short means the monthly contribution that would close the gap is higher than what you save now.
The projection is a smooth path on purpose
Savings compound monthly from your current age to the retirement age. The return does not vary, which makes the path easy to read and too smooth to be a promise. Include the employer match in the monthly amount. It is part of what gets invested.
The required contribution is the deposit that grows today’s balance to the target in the years you have left. Compare it with what you save now. If the required number is unrealistic, delay retirement a few years or lower the target before you assume a higher return.
A target needs a reason
A round number is a weak goal. A clearer one is about 25 times the annual spending the portfolio must cover, after Social Security or a pension. That is the same idea as a 4 percent withdrawal. The income field helps you see whether your target is in that neighborhood.
Social Security is not added for you. If it will cover part of your spending, the portfolio can be smaller. Do not type that future income in as if it were already saved. The 4 percent figure on the result is a rough monthly withdrawal from the projected balance, not a guarantee the money lasts.
Ahead is not the same as finished
A projection that beats the target assumes you keep contributing and that the return arrives smoothly. Stopping because you are ahead is riskier than it looks, especially if retirement is still decades away. Markets will not follow the line.
Saving enough and spending a sustainable amount are different questions. When you are close, run the drawdown calculator. It asks whether the balance survives the withdrawals, which this planner does not try to answer.
How to use the retirement planner calculator
On track means the projected balance reaches the target by your retirement age. The gap is the target minus the projection. The required monthly amount is what you would need to save, at the same return, to land on the target. A 4% figure on the result is a rough annual withdrawal, divided by 12, not a guarantee that the money lasts.
- Enter your age, the age you want to stop working, and what you have saved.
- Add the monthly amount you invest and a return you can live with for decades.
- Set a target nest egg, or think about the income you want and whether the target could support it.
- If you are short, the calculator shows the monthly contribution that closes the gap.
How the math works
The projection
Savings compound monthly from your current age to the retirement age. The return does not vary. That makes the path easy to read and too smooth to be a promise.
The required contribution
The calculator solves for the deposit that grows today’s balance to the target in the years you have left. Compare it with what you save now. The difference is the raise in savings that closes the gap, before any change in the return or the retirement date.
Income versus a nest egg
A common checkpoint is 25 times the annual income you want to withdraw, which is the same idea as a 4% withdrawal. The income field helps you see whether the target is in that neighborhood. Social Security, pensions, and part-time work reduce what the portfolio has to cover.
Age 34, retiring at 65, with a $1.5 million target
The defaults start at $88,000 and add $1,200 a month at 6.5% a year, with a desired income of $70,000.
Over 31 years the projection reaches about $2.09 million, above the $1.5 million target. The contribution that would have been enough for the target is about $707 a month, so the current $1,200 is ahead of that pace.
Terms worth knowing
- Nest egg
- The invested balance you plan to draw from in retirement.
- On track
- The projection meets or beats the target at your chosen retirement age.
- 4% rule
- A planning shortcut: withdrawing about 4% of the portfolio in the first year, then adjusting for inflation.
- Gap
- How far the projected balance sits below the target. A negative gap means you are ahead.
What to do with the number
Include the employer match in the monthly contribution. It is part of what gets invested.
If the required contribution is unrealistic, delay retirement a few years or lower the target before you assume a higher return.
A target of 25 times the spending you need from the portfolio is a clearer goal than a round number.
Run the drawdown calculator once you are close. Saving enough and spending a sustainable amount are different questions.
Questions people ask
What this leaves out
Contributions continue every month until the retirement age.
The return is constant and compounds monthly.
The 4% figure is a checkpoint, not a personalized spending plan.
Social Security, taxes, and fees are not included.
These figures are estimates to help you understand the tradeoff. They are not tax, legal, insurance, or investment advice. A fiduciary can look at the same numbers in the context of the rest of your plan.