Retirement Income Calculator
Calculate your estimated total monthly retirement income by combining investment account withdrawals, pension payments, and Social Security. Ideal for retirement readiness planning.
About this calculator
Retirement income typically comes from three buckets: tax-advantaged savings (401(k) and IRA), defined-benefit pensions, and Social Security. For savings accounts, a sustainable withdrawal is expressed as an annual withdrawal rate applied to the total balance, then divided by 12 for a monthly figure. The widely-cited 4% rule suggests withdrawing 4% of your portfolio annually, though your personal rate should reflect your expected retirement length and risk tolerance. The full formula is: Monthly Income = ((401k + IRA) × withdrawalRate / 100 / 12) + monthlyPension + monthlySocialSecurity. Adding all three streams gives you a realistic picture of whether your retirement income covers your expenses without depleting savings prematurely.
How to use
Assume you have a $500,000 combined 401(k)/IRA balance, a $1,200/month pension, $1,500/month Social Security, and a 4% annual withdrawal rate. Step 1 — Investment income: ($500,000 × 4% / 100) / 12 = $20,000 / 12 = $1,667/month. Step 2 — Add pension: $1,667 + $1,200 = $2,867/month. Step 3 — Add Social Security: $2,867 + $1,500 = $4,367/month total retirement income. Compare this to your estimated monthly expenses to gauge whether you are on track.
Frequently asked questions
What is a safe withdrawal rate for retirement savings?
The 4% rule, derived from the Trinity Study, suggests withdrawing 4% of your portfolio in year one and adjusting for inflation annually, giving a high probability of not running out of money over a 30-year retirement. However, with today's lower bond yields and longer life expectancies, many planners now recommend 3%–3.5%. Your ideal rate depends on your asset allocation, expected retirement length, flexibility to reduce spending, and other guaranteed income sources like pensions or Social Security. A financial planner can help model different scenarios.
How do I estimate my monthly Social Security benefit for retirement planning?
Your Social Security benefit depends on your 35 highest-earning years and the age at which you claim. You can get a personalized estimate by creating a free account at ssa.gov and reviewing your Social Security Statement. As a rule of thumb, the average retired worker receives around $1,800–$2,000/month in 2024, while the maximum for someone who earned the wage base limit for 35 years and claims at 70 is over $4,800/month. Use our Social Security Benefits Calculator for a quick estimate before checking your official SSA statement.
Should I include home equity or rental income in my retirement income calculation?
Home equity and rental income are legitimate and often substantial retirement income sources that deserve a place in your plan. Rental income is relatively straightforward to include as a monthly cash flow. Home equity can be accessed through downsizing, a reverse mortgage (for homeowners 62+), or a HELOC, though each option has distinct tax and liquidity implications. Including these assets in your plan can meaningfully reduce the pressure on your 401(k)/IRA withdrawal rate, potentially extending the life of your portfolio by years.