Why is the corpus so large?

Because withdrawals rise with inflation for decades. The gap between your return and inflation, the real return, is what supports the corpus, and when that gap is small the required capital rises sharply.

What if my return only just beats inflation?

Then the corpus approaches expenses times years, because nothing is being earned in real terms. That is the honest arithmetic and it is why the real return matters more than the nominal one.

Investmentretirement

Retirement Corpus Calculator

The retirement corpus that supports inflation-linked withdrawals for a stated number of years, and the monthly saving that builds it. The corpus is sized on the real return, not the nominal one.

Also called: retirement calculator, how much do i need to retire.

Corpus needed at retirement

$77,003,967.55

$77,003,967.55 at 60, because 60,000 today becomes $306,701.20 a month after 28 years of inflation. Saving $29,700.61 a month from now gets you there.

Monthly expenses at retirement

$306,701.20

First-year expenses in retirement

$3,680,414.42

Save this much a month

$29,700.61

What your existing savings become

$10,727,621.16

Years to retirement

Real return during retirement

0.94%

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Today’s expenses are inflated to the retirement date, which is usually the number that shocks people. The corpus then has to fund withdrawals that themselves keep rising with inflation, so it is capitalised at the real return rather than the nominal, which is why a seven percent return against six percent inflation needs a far larger corpus than the raw figures suggest. Finally the monthly saving is solved backwards from that corpus, net of what existing savings will grow to.

corpus = first-year retirement expenses capitalised at the real return, so withdrawals can rise with inflation

E_r: First-year expenses in retirement (currency)
r: Return during retirement (decimal)
g: Inflation during retirement (decimal)
n: Years in retirement (years)

Method and limits

What it assumes

Expenses in retirement match expenses today in real terms, which many people find is roughly right.
A constant return before and a constant return after retirement.

What it deliberately does not model

It assumes the corpus is exhausted at the end of the period, leaving nothing behind.
Sequence of returns risk is real and is not modelled: a poor first five years of retirement does far more damage than the same years later.
Healthcare costs typically inflate faster than general inflation.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

Why is the corpus so large?: Because withdrawals rise with inflation for decades. The gap between your return and inflation, the real return, is what supports the corpus, and when that gap is small the required capital rises sharply.
What if my return only just beats inflation?: Then the corpus approaches expenses times years, because nothing is being earned in real terms. That is the honest arithmetic and it is why the real return matters more than the nominal one.