Monthly Retirement Income Calculator

Estimate your potential monthly income in retirement based on your current savings, future contributions, and expected returns.

Current Retirement Savings ($):

Years Until Retirement:

Additional Annual Savings ($):

Expected Annual Return (Pre-Retirement, %):

Desired Retirement Duration (Years):

Expected Annual Return (During Retirement, %):

Expected Annual Inflation Rate (%):

Expected Monthly Fixed Income (e.g., Social Security, Pension) ($):

Your Retirement Income Estimate:

Total Estimated Nest Egg at Retirement:

Estimated Initial Monthly Income (Nominal):

Estimated Initial Monthly Income (Today's Purchasing Power):

Understanding Your Monthly Retirement Income

Planning for retirement is one of the most crucial financial steps you'll take. A key part of this planning is understanding how much monthly income your savings and other sources will generate once you stop working. Our Monthly Retirement Income Calculator helps you estimate this vital figure, giving you a clearer picture of your financial future.

How the Calculator Works

This calculator takes into account several factors to project your potential monthly income during retirement. It considers both the growth of your savings before retirement and how those savings will be drawn down during your retirement years, alongside any fixed income sources.

Key Inputs Explained:

Current Retirement Savings ($): This is the total amount you have saved for retirement right now in accounts like 401(k)s, IRAs, or other investment vehicles.
Years Until Retirement: The number of years you plan to continue working before entering retirement. This period allows your current and future savings to grow.
Additional Annual Savings ($): The amount you expect to contribute to your retirement accounts each year until you retire. Consistent contributions significantly boost your nest egg.
Expected Annual Return (Pre-Retirement, %): The average annual growth rate you anticipate your investments will achieve before you retire. This rate is crucial for compounding your wealth.
Desired Retirement Duration (Years): How many years you expect your retirement to last. This helps determine how long your nest egg needs to provide income.
Expected Annual Return (During Retirement, %): The average annual growth rate you anticipate your remaining investments will achieve while you are drawing income from them. Even in retirement, your money can continue to grow.
Expected Annual Inflation Rate (%): The average rate at which the cost of goods and services is expected to increase each year. Inflation erodes purchasing power, so it's important to consider its impact.
Expected Monthly Fixed Income (e.g., Social Security, Pension) ($): Any guaranteed monthly income you expect to receive, such as Social Security benefits, pension payments, or annuities.

The Calculation Process:

Future Value of Current Savings: Your existing savings are projected forward to your retirement date, growing at your specified pre-retirement return rate.
Future Value of Additional Savings: Your annual contributions are also projected forward, accumulating interest until your retirement date.
Total Nest Egg at Retirement: The sum of your future current savings and future additional savings forms your total estimated retirement nest egg.
Initial Monthly Withdrawal from Nest Egg: Using an annuity formula, the calculator determines how much monthly income your total nest egg can sustainably provide over your desired retirement duration, considering your post-retirement return rate.
Total Initial Monthly Income (Nominal): This is the sum of the monthly withdrawal from your nest egg and any fixed monthly income you expect. This figure represents the dollar amount you would receive in the first month of retirement.
Initial Monthly Income (Today's Purchasing Power): To give you a realistic sense of what that nominal income will feel like, this figure adjusts the initial monthly income for the inflation that occurs between now and your retirement date. It shows you the equivalent purchasing power in today's dollars.

Example Scenario:

Let's consider a hypothetical individual:

Current Retirement Savings: $100,000
Years Until Retirement: 20 years
Additional Annual Savings: $5,000
Expected Annual Return (Pre-Retirement): 7%
Desired Retirement Duration: 30 years
Expected Annual Return (During Retirement): 5%
Expected Annual Inflation Rate: 3%
Expected Monthly Fixed Income: $1,500

Based on these inputs, the calculator might show:

Total Estimated Nest Egg at Retirement: Approximately $700,000 – $800,000 (depending on exact compounding)
Estimated Initial Monthly Income (Nominal): Approximately $3,500 – $4,000
Estimated Initial Monthly Income (Today's Purchasing Power): Approximately $1,900 – $2,200

This example highlights how inflation can significantly reduce the real value of your future income, making it crucial to plan accordingly.

Important Considerations:

Taxes: This calculator does not account for taxes on withdrawals from retirement accounts. Your actual take-home income will be lower after taxes.
Market Volatility: Expected returns are averages. Actual market performance can vary significantly, impacting your nest egg's growth and sustainability.
Healthcare Costs: Retirement often brings increased healthcare expenses, which are not factored into this income calculation.
Unexpected Expenses: Life is unpredictable. It's wise to build in a buffer for unforeseen costs.
Longevity Risk: Living longer than expected is a wonderful thing, but it means your savings need to last longer. Re-evaluate your plan periodically.
Withdrawal Strategy: The calculator assumes a consistent withdrawal over your desired duration. Many retirees adjust withdrawals based on market performance or changing needs.

Use this calculator as a starting point for your retirement planning. For personalized advice, consult with a qualified financial advisor.