How should you invest for retirement?

Investment Normal Allocation Value Adjusted
Stocks, Diversified
Long-Term Bonds
1-5 Year US Bonds
Bank Savings, Cash
Predicted Return

How this calculator works: Part 1

This calculator works best if you are 66 or younger and not yet taking Social Security. It has two parts. The first part asks how you might invest toward retirement. 
  • ​For your retirement savings, is it more important to maximize potential gains, minimize potential losses, or do both? Your answer will balance stronger gains from stocks against greater stability from bonds.
  • What is your willingness to accept fluctuations, up and down, in the value of your savings? This answer, too, will affect your allocations to stocks and bonds, over time.
  • Do you have any extra resources that may cushion your spending needs? Your answer will govern the portion of your savings placed in safer, short-term investments.
  • When will you begin spending your savings? This affects how long your savings must last. The calculator adapts to your age, life expectancy, and first spending, using methods that historically protected against depleting one's savings.​
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After answering the questions, click the Start button below. The calculator assumes an average life-expectancy, based on your age and longevity data from Social Security. If some savings are to be spent this year, the calculator assigns a suitable portion to cash. It also generates two kinds of allocations, normal and value-adjusted. Value-adjusted allocations are reduced for stocks if they are currently over-valued (expensive), or the opposite if they are under-valued (a bargain), compared to long-term historical trends. To learn more, read Finding Value.

To find low-cost funds suitable for your investments, see our article on Basic Portfolios. The get more customized results, try our Best-Invest calculator.
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Are you saving enough to retire?

How this calculator works: Part 2

This part of the calculator will help you decide when and how to retire. It assumes you are not yet getting benefits paid to you by Social Security. Review the information below, to help answer the questions in the left panel. Then click the Finish button below. Try different answers, here and in Part 1, to see if they impact the results. Your answers should be for one person only. If you expect income from a spouse or partner, please use this part of the calculator twice, once for each of you separately.

Social Security. Questions 1-5 enable the calculator to estimate your retirement benefits from Social Security. The calculator requires the age when you will or did stop working, your month of birth, the number of years you have had Social Security taxes withheld from your pay, and the age when you want your full benefits to begin. Consider starting your benefits at the latest possible age (70), not the earliest (62). Also enter, if available, the future monthly benefit that Social Security will pay you. This should be your full retirement benefit, not a spousal benefit. You may find it on your most recent mailing from Social Security or on their retirement estimator. If you don't know this value, leave question 5 blank; the calculator will provide an estimate.

Pension. Questions 6-8 concern a pension. Please enter the following if you have or expect a pension from an employer:
  • The monthly payment, now or when the pensions starts.
  • Whether the pension adjusts for inflation (COLA).
  • Your age when you start getting pension payments.

Financial Resources. Questions 9-12 concern your financial status: how much you earn now or when you last worked, how much income you may need when fully retired, the current value of your retirement savings, and the amount that you and your employer may add to your savings in the future.

Estimates. After answering the questions, click the Finish button below. Estimated income from all sources will be shown for ages 60 to 70, unless you have already passed some of these ages. All values are adjusted for future inflation, so that you can equate them to your current standard of living. If the income available is greater than the amount needed, congratulations, you are doing well! If it's less, try changing some answers, in either Part 1 or Part 2, and click Finish again. To examine alternate methods for taking safe payouts from your savings, see our safe payouts calculator.
Source Age 60 Age 62 Age 64 Age 66 Age 68 Age 70
Savings
Total Available
Monthly Income
Safe Payouts
Social Security
Pension
Paid Work
Summary
Available Monthly
Needed Monthly

​Like any forecast, the estimates shown here will be less accurate for the distant future than for the near term. You should revisit this calculator in the future, particularly if you will retire within 10 years. The results will change as you approach the year to start spending your savings. Be aware that:
  • All amounts are real values that represent buying power in today's dollars. Your income from paid work and your expenses are assumed to stay even with inflation, on average, over the long term. Social Security benefits are by law adjusted for inflation. Historically, stocks and bonds have tended to grow faster than inflation, if held long enough. A pension, however, may decline in real value, unless it has a COLA.
  • Growth of your retirement savings depends on the value-adjusted allocations in Part 1, and on the amount saved each year by you and your employer. Payouts from savings are based on your life expectancy. To learn more, see the Life+6 method and other options in our Safe-Payout calculator.
  • ​The calculator makes no assumptions about taxes you may have to pay on your investments or withdrawals.
  • Diversification is not a guarantee of positive returns. The future may depart from historical trends, and market changes could cause your results to differ, up or down. You could lose money. Even low-risk investments like T-Bills and bank savings can lose buying power when interest rates are very low or inflation runs higher than expected.
For more information on how to apply results from our calculators ...Please share this calculator with your friends. Doing so only sends a link. It will not share any of your personal information.

Note: This calculator was most recently updated on January 8, 2017, with current inflation rates and long-term value-adjustments. (See our article Finding Value for details.)