Retirement Savings Calculator

My father asked me this at breakfast last Christmas. He's 71. He retired at 64. Two coffees in, he looked up and said so, look. Do I actually have enough.

I didn't have a good answer. I still don't, really. But I've been reading about this stuff for months now since he asked. So here's what I've actually found.

The 4 percent rule, roughly

There's a guy named Bill Bengen. He was a financial planner in California in the early 90s. His clients kept asking him the same question my dad asked me. How much can I take out each year.

So he sat down with a spreadsheet. This was 1994. The data went back to 1926. He ran the numbers for every possible 30-year retirement window he could find.

The answer came back: 4.15 percent. Take that much out the first year. Adjust for inflation each year after. You'd never run out. Not once. Not even if you retired in 1929 right before the crash.

Somebody rounded it down to 4. Because 4 is catchier. That rounded-down number is what became famous.

He published the paper in October 1994 in the Journal of Financial Planning. By the 2000s pretty much every financial advisor in America was quoting it. My dad's guy quoted it to him in 2018.

Here's the weird part

Bengen himself doesn't think 4 is right anymore.

He put out a new book in 2025. It's called A Richer Retirement. The updated number is 4.7 percent.

For someone who saved hard their whole life, that extra 7 grand is real. A trip to Alaska, or a new transmission and money left over.

Bengen's case for the higher number is sort of mathy. He broadened the portfolio in his model. The old one was just U.S. large-cap stocks and medium-term government bonds. The new one spreads across large, mid, small, micro-cap. A bit of international. He landed on 55 percent stocks, 45 percent bonds, plus a tiny 5 percent sliver of cash in T-bills.

And 4.7 isn't even his typical case. It's the worst case. Bengen says the average safe rate across the last century has actually been closer to 7 percent. Seven. Most retirees, he says, can probably take 5.25 or 5.5 without losing sleep.

He also admitted something I found kind of sad. A lot of his old clients who followed the 4 percent rule died rich. They left big estates. And they missed trips they'd wanted to take.

Why no two experts agree

So 4.7 is Bengen's number. Fine.

Morningstar ran their own version in 2021 and got 3.3 percent. Different methodology. They used forward-looking return estimates instead of historical ones. Bonds paid almost nothing then. Stocks looked pricey. Their math said take less.

They updated to 3.7 percent in 2024. Still well below Bengen.

Ask a financial planner and they'll land somewhere in that range. Usually around 4. My dad's planner told him 3.75 last year.

Nobody really knows for sure. The future doesn't have to behave like the past.

Inflation is the real thing to worry about

Bengen calls inflation the greatest enemy of retirees. He's said this in basically every interview he's done since 2022.

Here's why. A market crash hurts for a year or two. Then markets recover. Inflation compounds and never reverses. If prices rise 3 percent a year, a $50,000 lifestyle costs $67,000 in ten years. At 5 percent, it's $81,000. Your grocery bill doesn't un-double.

The 1970s are the nightmare. Inflation hit double digits. Retirees who'd just started drawing from savings had to pull more and more just to buy the same groceries.

The portfolio shrank. Nobody was adding to it.

My own grandmother retired in 1968. Stock market peak. Then Vietnam spending, then oil shocks, then stagflation. At 70 she went back to work as a bookkeeper at a car dealership outside Pittsburgh. Hated it. Stuck it out six years anyway.

That's the story Bengen built his rule around. A 1968 retiree with a 4 percent starting withdrawal made it through 30 years by the skin of their teeth. Barely. That's why he picked 4.

What about healthcare, which nobody plans for

This is where most people get caught off guard.

Fidelity puts out a study every summer. Their 2025 number. A 65-year-old retiring now will spend around $172,500 on healthcare for the rest of their life. After tax. Out of pocket. Just them. Not a couple.

A couple lands around $330,000.

And that's with Medicare. I had to look at the footnotes to believe it. Those numbers are the stuff Medicare doesn't cover or only half-covers. Premiums for Part B and Part D. Deductibles. Copays. Dental. Vision. Hearing aids. The extra things.

Fidelity also found 1 in 5 Americans has never thought about healthcare costs in retirement at all. For Gen X it's 1 in 4. My uncle is in that group. He's 58 and his plan is I'll figure it out.

Long-term care is worse. About 70 percent of people who reach 65 will need some version of it eventually. Home aide. Assisted living. Nursing home. Medicare basically doesn't pay for any of it past a couple weeks. You pay out of pocket until you're broke, then Medicaid takes over. That's the system.

The median American isn't close to ready

The Federal Reserve runs the Survey of Consumer Finances every three years. Latest one is 2022. The median retirement balance for Americans aged 55 to 64 was $185,000.

Not $1 million. $185,000.

Apply Bengen's 4.7 percent. That's $8,700 in year one.

Social Security picks up the slack for most. The average retired worker is getting about $2,024 a month as of March 2026. That's around $24,300 a year. Add the $8,700 from savings and you're at $33,000 total for a median household.

That's not terrible. It's also not a vacation to Portugal kind of retirement.

Which is why Social Security decisions matter as much as the withdrawal rate. Probably more, honestly.

The Social Security thing, briefly

You can start at 62. You can wait until 70. Each year you wait past 62 bumps your monthly check up. By about 7 or 8 percent. Depending on your birth year.

Claiming at 70 instead of 62 gets you roughly 77 percent more per month. Forever. For every month you live past the break-even, you're ahead.

Most people claim at 62 or 63. I find this strange. The research is pretty clear that waiting wins for most people who are healthy. But it requires having savings to bridge the gap, and a lot of people don't.

My dad claimed at 64 because he retired early. He wishes he'd waited but he needed the money.

Things the rule doesn't cover

The 4.7 percent rule quietly assumes you spend the same inflation-adjusted amount every single year. Which is insane if you think about it.

Real spending is lumpy. Your car dies. Your roof leaks. Your dog gets cancer and the surgery is $8,000. Your grandkid's wedding. These hit every couple of years and they're not in any model.

David Blanchett at PGIM looked at actual retiree spending in a 2014 paper. He found it drops about 1 percent a year in real terms through the middle of retirement. Then jumps back up near the end because of medical stuff. Researchers call it the retirement smile. A flat 4 percent rule over-saves for most people who follow that pattern.

So what actually works

A few things I've come to believe after reading too much about this.

Don't pick a number and set it in stone. Markets move. Your health moves. Life moves. Check in every year and adjust.

If the first few years of your retirement hit a bad market, pull back. This is called sequence-of-returns risk. It's the thing that actually kills portfolios. A 2000 retiree who kept pulling 4 percent ran into trouble. Dot-com crash, then 2008, back to back. A 2000 retiree who cut back to 3 percent for a few years made it fine.

Keep a year or two of expenses in cash. Not for returns. For not having to sell stocks when stocks are down.

Have a range in mind, not a target. For most people, something between 4 and 5.5 percent is fine depending on the year. Some years you take the bottom of that range. Some years you take the top. You sleep better.

My own take on my dad's question

I told my dad he probably has enough. He has a decent pension from the utility he worked at for 31 years. Social Security. The house, paid off. Maybe $340,000 in his 401k.

He's going to be fine. He was always going to be fine.

What he actually wanted, I realized later, wasn't a number. He wanted someone to tell him it was okay to go on the Alaska trip my mom keeps mentioning. That was the whole question.

So I told him to go on the trip.

The technology changes. The math mostly doesn't.