Question 1

How much money do I need to retire comfortably?

Accepted Answer

A common guideline is to save 25 times your expected annual expenses in retirement (based on the 4% rule). If you need $50,000 per year, you'd need $1,250,000. However, your actual number depends on your lifestyle, healthcare costs, Social Security benefits, and how early you retire. Use our calculator to get a personalized estimate based on your specific situation.

Question 2

What is the 4% rule and does it still work?

Accepted Answer

The 4% rule says you can withdraw 4% of your retirement savings in the first year, then adjust for inflation each year, and your money should last at least 30 years. It was developed based on historical U.S. market data. Most financial planners still consider it a reasonable starting point, though some suggest 3.5% for more conservative planning, especially for early retirees who need their money to last longer than 30 years.

Question 3

Should I contribute to a 401(k) or Roth IRA first?

Accepted Answer

First, contribute enough to your 401(k) to get the full employer match (that's free money). Then, if you're in a lower tax bracket now than you expect to be in retirement, prioritize a Roth IRA for tax-free growth. If you're in a high tax bracket now, maximize your traditional 401(k) for the tax deduction. Many people benefit from having both types of accounts for tax diversification in retirement.

Question 4

When should I start taking Social Security?

Accepted Answer

You can start at 62 (reduced benefits), full retirement age (66-67 depending on birth year), or delay until 70 (increased benefits of about 8% per year of delay). Delaying generally pays off if you're healthy and expect to live past your late 70s. Taking early makes sense if you need the income or have health concerns. For married couples, coordinating timing between spouses can maximize total lifetime benefits.

Question 5

How do I catch up on retirement savings if I started late?

Accepted Answer

Take advantage of catch-up contributions (an extra $7,500 in your 401(k) if you're 50+). Maximize tax-advantaged accounts, reduce expenses to increase your savings rate, and consider working a few extra years. Each additional year of work provides triple benefits: one more year of saving, one more year of investment growth, and one fewer year of withdrawals. Even starting at 45, consistent saving can build a meaningful retirement fund.

Question 6

How much should I budget for healthcare in retirement?

Accepted Answer

Healthcare is typically one of the largest retirement expenses. A 65-year-old couple retiring today can expect to spend approximately $315,000 on healthcare throughout retirement, according to Fidelity's estimates. Medicare covers many costs starting at 65, but you'll still pay premiums, deductibles, and copays. If you retire before 65, you'll need to budget for private health insurance to bridge the gap.

Retirement Calculator

How to Use This Calculator

Enter your current age and target retirement age

Set your current savings and monthly contribution

Choose your expected annual return

Set your desired retirement income

Understanding Your Results

Projected savings at retirement

The 4% rule income

On track vs. needs adjustment

Sources

Retirement Readiness Scorecard

Frequently Asked Questions

Financial Planning Toolkit

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