Retirement and FIRE Calculator

Retirement planning is a question with a deadline: will the money you save between now and the day you stop working support the life you want after that? The answer depends on five things you can estimate, not guess blindly: how long you have, how much you save, what the savings earn, how fast prices rise and how much you will spend. The calculator joins them into one projection and tells you, in plain money, whether the plan works and what would fix it.

From spending to a target

Start with the yearly spending you want, in today’s money. Inflation raises it to the level it will have on the day you retire: spending × (1 + inflation)^years. The corpus needed is that figure divided by the withdrawal rate. A rate of 4% means a corpus 25 times the first year’s spending, which comes from US studies of historical portfolios and is only a rule of thumb. A lower rate, such as 3%, is safer for a long retirement and needs a larger corpus.

Building the corpus

The projection adds your monthly saving at the end of each month, grows everything at the pre-retirement return divided by 12, and raises the monthly amount once a year by the step-up percentage. Your current savings are added to the start. The result is the projected corpus on the retirement date, and the table shows it every five years so you can see how most of the growth arrives in the last decade.

A worked example

The defaults describe a 30-year-old retiring at 55 with 5,00,000 saved, saving 25,000 a month with a 5% yearly step-up, a 10% return, 6% inflation and yearly spending of 6,00,000 in today’s money. Spending at 55 is 25,75,122, so at 4% the corpus needed is 6,43,78,061 (1,50,00,000 in today’s money). The projected corpus is 5,58,11,319, a shortfall of 85,66,742. Saving 29,302 a month from now, rising 5% a year, would close the gap. At a 7% return after retirement, the corpus would last 24 years, to age 79, which is short of age 90, and the page warns you. The second sample, a 35-year-old retiring at 60 with 15,00,000 saved, 30,000 a month and spending of 7,20,000, ends with a small surplus of 5,71,161 over a 7,72,53,673 target, yet the money still lasts only to age 88.

How long the money lasts

After retirement, the model withdraws the first year’s inflated spending at the start of the year, grows what is left at the post-retirement return, and raises the withdrawal by inflation each year, until a withdrawal cannot be met. That count of years, added to the retirement age, is the age the money lasts to. It is a stricter test than the withdrawal-rate rule, because it uses your own returns and inflation, and it shows quickly how sensitive the plan is to a lower return.

Edge cases

The retirement age must be later than your age, and the plan-to age later than the retirement age. A saving of zero is allowed and shows what current savings alone would become. A very long period produces a very large corpus, which is correct arithmetic but a poor forecast. Spending that falls in later life, a pension or rental income reduce the corpus you need, and you can reflect that by lowering the spending figure.

Limits

Returns, inflation and the withdrawal rate are single constants; real markets rise and fall, and a bad sequence of early returns can sink a plan that works on average. Taxes, healthcare costs and one-off expenses are not included. Use the result to compare scenarios, and revisit it every year.

Related tools

• SIP Calculator projects a monthly investment by itself, which you can compare with the saving suggested here.
• Inflation Calculator isolates the part of the plan that depends on rising prices.
• NPS Pension Calculator shows what a pension account might add to your income in retirement.
• 401(k) Calculator is the US equivalent, with an employer match.