Retirement Income Calculator
Your retirement portfolio can generate monthly income based on your withdrawal rate. The 4% rule (40× rule) allows $40,000/year from a $1M portfolio. Add Social Security and any pension, then compare the total with what you plan to spend to see your income gap.
Enter your portfolio size, withdrawal rate, Social Security and pension income, and planned monthly spending to calculate your retirement income, the shortfall or surplus against your spending, and how long the portfolio lasts.
| Year | Portfolio Value | Annual Withdrawal | Monthly Income (total) |
|---|
How Retirement Income Works
Retirement income from a portfolio comes from withdrawals. The sustainable withdrawal rate determines how much you can take each year without running the portfolio to zero. The 4% rule — withdraw 4% of your initial balance in year 1, then adjust for inflation each subsequent year — has survived nearly every historical 30-year retirement period since 1926.
Estimating What You Will Spend
The common rule of thumb is that retirees need 70%–80% of their pre-retirement income. Treat it as a starting point, not a fact: a retiree with no mortgage may need only 60%, while someone planning a lot of travel may need 100% or more. Some costs disappear when you stop working — payroll taxes, commuting, work clothes and lunches, and usually retirement contributions — while healthcare tends to rise. The most reliable number comes from a category-by-category budget: housing (including property tax, insurance and upkeep once the mortgage is gone), Medicare premiums and out-of-pocket medical costs, food, transport, and travel and hobbies.
Spending also changes shape over a retirement. Research by David Blanchett and others describes a "retirement spending smile": higher in the active early years, lower in the slower middle years, then rising again late in life as healthcare and long-term care costs grow. Planning for flat, inflation-adjusted spending — which is what this calculator does — is therefore on the conservative side for most people.
Your Retirement Income Gap
Your income gap is what is left of your spending after Social Security, pensions and other regular income. That is the amount your savings must supply every year. With the default inputs above — $5,500 a month of spending, $1,800 of Social Security and $3,333 from a $1,000,000 portfolio at 4% — income falls $367 a month short. Covering the full $3,700-a-month gap at a 4% withdrawal rate would take $3,700 × 12 ÷ 0.04 = $1,110,000; the alternative is withdrawing about 4.4% a year from the $1,000,000 you have.
When the gap is positive you have four levers: save more before retiring, spend less, raise guaranteed income, or accept a higher withdrawal rate and the depletion risk that comes with it. Useful ways to pull them:
- Delay Social Security: Each year you wait past full retirement age, up to 70, raises the benefit by 8% — permanently.
- Work part-time early on: Even $1,000–$1,500 a month in your first retirement years cuts withdrawals when the portfolio is most exposed to a market fall.
- Downsize: Selling a high-equity home can both release a lump sum and lower monthly housing costs.
- Buy guaranteed income: Converting part of your savings to an income annuity closes part of the gap for life.
- Keep discretionary spending flexible: Housing and healthcare are hard to cut, but travel and entertainment can flex down in bad market years.
The gap also moves over time. Social Security rises each year with a cost-of-living adjustment, but most private pensions are fixed in dollars — at 3% inflation a $1,000 monthly pension loses about half its buying power in 23 years — so a gap that looks closed at 65 can reopen later.
| Guaranteed Income | Per Month | Monthly Gap | Portfolio Needed (4%) |
|---|---|---|---|
| None | $0 | $5,500 | $1,650,000 |
| Single, Social Security at 62 | $1,400 | $4,100 | $1,230,000 |
| Single, Social Security at 67 | $2,000 | $3,500 | $1,050,000 |
| Social Security $2,000 + pension $1,200 | $3,200 | $2,300 | $690,000 |
| Couple, both claiming at 67 | $3,600 | $1,900 | $570,000 |
The Portfolio Required at Different Income Levels
| Monthly Income | At 3% Rate | At 4% Rate | At 5% Rate |
|---|---|---|---|
| $2,000/mo ($24K/yr) | $800,000 | $600,000 | $480,000 |
| $3,500/mo ($42K/yr) | $1,400,000 | $1,050,000 | $840,000 |
| $5,000/mo ($60K/yr) | $2,000,000 | $1,500,000 | $1,200,000 |
| $8,000/mo ($96K/yr) | $3,200,000 | $2,400,000 | $1,920,000 |
How Social Security Changes Everything
Social Security is effectively a pension that offsets your portfolio withdrawal needs dollar-for-dollar. A $2,000/month Social Security benefit reduces your required annual portfolio withdrawal by $24,000. At the 4% rule, that reduces your required portfolio by $600,000. This is why Social Security claiming strategy — whether to claim at 62, 67, or 70 — dramatically affects how much you need to save.
Delaying Social Security from 62 to 70 increases the monthly benefit by approximately 75%–80%. On a $1,500/month benefit at 62, that becomes roughly $2,600–$2,700/month at 70. The difference of $1,100–$1,200/month is equivalent to another $330,000–$360,000 in portfolio savings (at the 4% rule).
To work backward from income to portfolio target, use the FIRE Number Calculator. To see what a Roth conversion would do to your taxable income in retirement (affecting withdrawal efficiency), try the Roth Conversion Calculator. For more on how to structure your retirement income, read our guide on how much monthly income your savings can generate.
Frequently Asked Questions
How much income can I get from a $1 million portfolio?
At the 4% rule: $40,000/year ($3,333/month). At 3.5%: $35,000/year ($2,917/month). At 5%: $50,000/year ($4,167/month). Adding Social Security income on top of these amounts gives your total retirement income. A $1,800/month Social Security benefit plus $3,333/month from the portfolio = $5,133/month total.
How long will my retirement savings last?
It depends on how your withdrawal rate compares with your return after inflation. With a 6% return and withdrawals that rise 3% a year, $20,000 a year from $500,000 (4%) lasts about 49 years, while $40,000 a year (8%) runs out in about 17. Keep withdrawals flat instead and the $20,000 plan never runs out, while the $40,000 plan lasts about 24 years. The year-by-year table above shows the path for your own inputs.
What is the 4% rule?
Withdraw 4% of the initial portfolio in year one, then adjust for inflation each year. Based on William Bengen's 1994 research and the 1998 Trinity Study that followed it, this rate historically survived 30-year retirements in nearly all scenarios back to 1926. Many planners now recommend 3.5% for longer horizons (40+ years) or as a buffer against poor sequence-of-returns.
What is a retirement income gap?
It is the difference between what you plan to spend and your guaranteed income from Social Security, pensions and annuities — the part your savings must cover. Spending $5,000 a month with $1,800 of Social Security leaves a $3,200 monthly gap, or $38,400 a year. At a 4% withdrawal rate that takes $960,000 of savings (the annual gap × 25). If covering your gap would need a withdrawal rate above about 5%, the depletion risk over a 25–30 year retirement is significant, and it is worth delaying retirement or Social Security, trimming spending, or adding guaranteed income.
How does Social Security affect retirement income needs?
Dollar-for-dollar: every $1,000/month in Social Security income reduces your required portfolio withdrawal by $12,000/year, which reduces the required portfolio by $300,000 at the 4% rule. Delaying Social Security from 62 to 70 can add $1,000–$1,500/month to the benefit — equivalent to $300,000–$450,000 in additional savings.
How much do I need to retire on $5,000 a month?
With no other income: $1,500,000 at the 4% rule ($5,000 × 12 ÷ 0.04). With $2,000/month Social Security, your portfolio only needs to generate $3,000/month, requiring $900,000. With $2,500/month Social Security, $750,000 is sufficient. Social Security is by far the biggest variable in retirement income planning.
Does retirement spending go down over time?
Often, but not in a straight line. Spending tends to be highest in the active early years, dips through the slower middle years, and rises again late in life as healthcare costs grow — the "retirement spending smile". Guaranteed income moves too: Social Security gets annual cost-of-living increases, but most private pensions are fixed and lose buying power to inflation. Planning for flat, inflation-adjusted spending is the conservative choice.
Should I plan for long-term care costs?
Yes. Medicare does not cover most long-term care — extended nursing-home stays, assisted living or ongoing home health aides — and a private nursing-home room can cost more than $100,000 a year. Common approaches are long-term care insurance (usually bought in your 50s, before health problems make it unavailable), hybrid life/long-term-care policies, or setting aside a dedicated reserve on top of your regular spending plan.
Related Calculators
Sources & method
This calculator implements withdrawal and income maths — standard financial mathematics that no single body maintains as an official standard. The formula is shown on this page so you can verify it. Income gap = planned spending − (Social Security + pension/other income + portfolio withdrawal); portfolio needed = (spending − guaranteed income) × 12 ÷ withdrawal rate.
Social Security estimates and delayed-claiming credits: SSA — Delayed Retirement Credits and my Social Security. Long-term care coverage: Medicare.gov — Long-term care.
Not financial or tax advice. This is an educational estimator. It does not know your full situation, and tax rules change. Akshaya Panda, who builds and verifies these tools, is an engineer — not a financial adviser, accountant, or tax professional. Before acting on a result that matters, check it with someone licensed to advise you.