Reality-Based Retirement Calculator

Retirement planning based on current market conditions, not outdated assumptions

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Enter your current situation and retirement goals

Total in 401k, IRA, etc.

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% of your contribution

Monthly benefit estimate

Why the 4% Rule is Outdated in 2024

Most retirement calculators still use the "4% rule" based on 100-year market averages. But those averages include periods of much higher bond yields and lower stock valuations. Today's reality requires a more conservative approach.

Current Market Reality vs. Historical Averages:

What Old Calculators Assume:

  • • 10-12% stock returns (historical average)
  • • 5-6% bond yields
  • • 4% safe withdrawal rate
  • • Ignores sequence of returns risk

Current Market Reality:

  • • 6-8% forward stock returns (high valuations)
  • • 3-4% bond yields
  • • 3-3.5% realistic withdrawal rate
  • • High sequence risk from volatility

The Sequence of Returns Risk

This is the biggest risk traditional calculators ignore. If you retire into a bear market and start withdrawing money while your portfolio is declining, you can run out of money decades sooner than expected. Our calculator factors in this real-world risk.

Healthcare Cost Reality

Healthcare costs in retirement average 15-20% of your total retirement budget, and they're growing faster than inflation. A couple retiring today needs to budget $300,000+ just for healthcare over their retirement years.

What Makes Our Calculator Different

  • • Uses conservative 3.5% withdrawal rate instead of 4%
  • • Models sequence of returns risk scenarios
  • • Includes realistic healthcare cost projections
  • • Factors in current market valuations
  • • Provides multiple scenario planning
  • • Accounts for inflation impact

The Power of Working Just 2-3 Years Longer

One of the most powerful levers for retirement security is working just a few years longer. Working from 65 to 67 can increase your retirement security by 25-30% because you're:

  • Contributing to savings for 2 more years
  • Not withdrawing for 2 years
  • Allowing your portfolio to grow longer
  • Delaying Social Security for higher benefits

💡 Pro Tip: The 25x Rule

A more conservative approach than the 4% rule is the 25x rule: save 25 times your annual expenses before retiring. If you need $60,000/year, aim for $1.5 million in savings. This accounts for today's market reality and provides a larger safety buffer.

Frequently Asked Questions

Q: Why does your calculator show lower returns than others?

A: We use forward-looking projections based on current market valuations rather than historical averages. When stocks are expensive (like today), future returns are typically lower.

Q: What is sequence of returns risk?

A: It's the risk that poor market returns early in retirement can devastate your portfolio because you're withdrawing money during the decline. This can cause you to run out of money much sooner than expected.

Q: Should I really only withdraw 3.5% instead of 4%?

A: Given today's market conditions and longer lifespans, many financial experts recommend 3-3.5% as a safer withdrawal rate. The extra cushion protects against sequence risk and unexpected expenses.

Q: How accurate are these healthcare cost estimates?

A: Healthcare costs are highly variable, but our estimates are based on current industry data. Consider purchasing long-term care insurance or setting aside additional funds for health-related expenses.

Q: What if Social Security benefits are reduced?

A: Even if no action is taken, Social Security would pay about 77% of scheduled benefits after 2034. Our calculator allows you to adjust your Social Security expectations to account for potential changes.