Retirement Need
Estimate the nest egg needed to fund a target retirement income.
About Retirement Need
The nest egg needed is retirement income divided by the sustainable withdrawal rate, such as the common four-percent rule. A lower withdrawal rate requires a larger portfolio for the same income. Anchoring retirement to an income and a safe withdrawal rate gives a concrete savings target to plan toward.
Formula
Retirement Need
Nest egg = annual income / withdrawal rate
- withdrawal rate
- percent of the portfolio taken each year
Worked example
With the default values below, Retirement Need returns Amount Needed of $1,500,000.00. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Annual expenses in retirement
- 60,000
- Sustainable withdrawal rateaccepts 0.1–100 %
- 4 %
Results
- Amount Needed
- $1,500,000.00
- Income per Month
- $5,000.00
- Inverse of Rate
- 25.0
Step by step
- 1Values used
- 2Retirement Need
- 3Amount Needed= 1,500,000.00
- 4Income per Month= 5,000.00
- 5Inverse of Rate= 25.0
Assumptions and limits
- The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation or tax into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is Retirement Need calculated?
Nest egg = annual income / withdrawal rate The nest egg needed is retirement income divided by the sustainable withdrawal rate, such as the common four-percent rule. A lower withdrawal rate requires a larger portfolio for the same income.
Why does Retirement Need matter?
Anchoring retirement to an income and a safe withdrawal rate gives a concrete savings target to plan toward.
What values do I need to enter?
This calculator takes 2 inputs: Annual expenses in retirement, Sustainable withdrawal rate. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.