Retirement Calculator
Run 1,000 Monte Carlo simulations to estimate your probability of retirement success. Model tax buckets, Social Security timing, Roth conversions, and state-specific taxes.
Texas has no state income tax.
401k, IRA, Roth, brokerage — everything
Est. return: 8.8%/yr
Enter your information to see projections
How Much Do You Need to Retire?
The most common answer is 25× your annual spending — the foundation of the 4% rule. If you plan to spend $60,000 per year, you'd need $1.5 million. But this single number hides enormous variation. It assumes a 30-year retirement, no Social Security, no pension, and no state income tax. In reality, a 65-year-old couple with $1,200/month in combined Social Security benefits needs far less in savings than a single 55-year-old with no guaranteed income. The right answer is personal — which is why this calculator models your specific situation across 1,000 possible futures instead of returning a single number.
Spending also evolves. Research on retiree spending patterns consistently shows a "spending smile": higher discretionary spending in the early "go-go years," tapering in the middle "slow-go" phase, and reduced spending late in retirement as activity declines — while healthcare costs rise sharply. Our advanced mode models this pattern, which typically extends portfolio longevity compared to assuming flat spending throughout.
What Is a Good Retirement Success Rate?
A "success" in Monte Carlo terms means your portfolio never reaches zero before your planning horizon. Financial planners often target 85–90% — meaning in 85–90 out of 100 simulated futures, you don't run out of money. Aiming for 100% success typically means leaving a lot of money unspent. Aiming for 70% is riskier but may be appropriate if you have flexibility to cut spending or if you have significant guaranteed income (Social Security, pension) that covers essential expenses even if the portfolio is depleted.
The framing matters: a 75% success rate doesn't mean you have a 25% chance of poverty. It means in 25% of simulated sequences, your portfolio is exhausted before your planning age — but you still have Social Security and can adjust spending. The Guyton-Klinger guardrails approach (spending more in good years, less in bad ones) can dramatically improve success rates over rigid fixed-spending rules.
How Monte Carlo Simulation Works
Instead of assuming your portfolio earns exactly 7% every year, Monte Carlo simulation draws from a realistic distribution of annual returns. The stock market has averaged about 9.5% annually since 1928, but with a standard deviation of about 17% — meaning two-thirds of years fall between −7.5% and +26.5%. We run 1,000 independent sequences, each drawing random annual returns from this distribution for every year of your retirement. Some sequences hit a 2008-style crash early; others enjoy a 1990s-style bull run. The fraction of sequences where your portfolio survives to your planning age is your probability of success.
Critically, we apply slight mean-reversion (returns in consecutive years are modestly negatively correlated, as observed historically) and model the glide path — your allocation shifts toward bonds over time, reducing both risk and expected return. The result is a realistic fan chart showing the spread of possible outcomes, not a false single-point prediction.
The Best Age to Claim Social Security
For someone with a full retirement age (FRA) of 67, claiming at 62 permanently reduces benefits by 30%. Claiming at 70 permanently increases them by 24% above FRA — a 77% difference between earliest and latest claiming. If your FRA benefit is $2,000/month, that's $1,400 at 62 vs. $2,480 at 70.
The "break-even age" for delaying from 62 to 70 is typically around 80–82. If you expect to live past that age, delaying is mathematically superior — and the longevity protection of a higher guaranteed income becomes more valuable the longer you live. For married couples, the optimal strategy often involves the higher earner claiming at 70 (maximizing the survivor benefit) while the lower earner claims earlier.
Tax-Smart Retirement Withdrawals
The order in which you withdraw from Traditional (pre-tax), Roth (post-tax), and taxable accounts can meaningfully affect lifetime taxes. The classic withdrawal sequence: first use RMDs from Traditional (forced anyway), then taxable account (to manage MAGI and harvest gains), then Traditional, then Roth last (preserving tax-free growth as long as possible). For Roth conversions, the optimal window is the "gap years" between retirement and age 73 when RMDs begin. If your income is lower in those years, converting to Roth at a 12% or 22% bracket beats paying your heirs' 37% rate later.
State taxes add another layer: retiring in Florida vs. California can be worth hundreds of thousands of dollars in lifetime tax savings. Pennsylvania and Illinois exempt almost all retirement income. Our advanced mode models all 50 states with retirement-specific exemptions, giving you the real picture of where to retire.
Retirement Calculator FAQ
How much do I need to retire?
Start with 25× your planned annual spending. Then subtract guaranteed income (Social Security × 25, pension × 25) to get the portfolio gap. Adjust for your state's tax treatment — California retirees pay much more than Florida retirees on the same income.
Can I retire at 60 with $1 million?
Maybe. At $40,000/year spending and 4% withdrawal, $1M is exactly at the boundary. But 60 means a 30+ year retirement with no Social Security for 2+ years (earliest claim is 62). Our simulator shows the probability given your specific income and state taxes.
What is the 4% rule for retirement?
Withdraw 4% of your portfolio in year one, then adjust for inflation each year. In historical 30-year periods, this worked about 95% of the time. It's a useful starting point but not a guarantee — Monte Carlo simulation gives a more nuanced picture.
How does Social Security affect retirement planning?
Social Security is the most powerful guaranteed income source most Americans have. Every dollar of Social Security replaces about 25 dollars of portfolio savings needed (at 4% SWR). Maximizing your benefit through optimal claiming is often worth more than any investment decision.
What is sequence of returns risk?
A market crash in your first 5 years of retirement is far more damaging than the same crash at year 20. You're forced to sell at low prices, permanently reducing the shares that will recover. Our stress test scenario models a -20%, -15%, +5% sequence in years 1-3 of retirement.
When should I start a Roth conversion?
The window between retirement and age 73 (before RMDs begin) is often optimal. If your taxable income is low in those years, you can convert Traditional to Roth at 12-22% tax rates, reducing future RMDs and potentially saving significant lifetime taxes.
How do taxes work in retirement?
Traditional withdrawals: taxed as ordinary income. Roth withdrawals: tax-free. Social Security: up to 85% taxable based on your provisional income. RMDs start at 73 and are mandatory taxable income. State taxes vary wildly — Pennsylvania taxes zero; California taxes everything.
What is a Monte Carlo retirement simulation?
Rather than assuming a fixed annual return, Monte Carlo runs thousands of randomized market sequences using historical volatility. The result is a probability — e.g., "87% chance your money lasts to age 90" — rather than a single-point prediction that assumes markets are predictable.