Monthly Retirement Income Calculator

Estimate your total monthly income in retirement from all sources. This calculator combines your Social Security benefits, pension payments, investment portfolio withdrawals, annuity income, and any other earnings to give you a clear picture of your retirement "paycheck." See how your income stacks up against your expenses, project how long your portfolio will last, and get an income adequacy score to gauge your financial readiness.

This tool is designed for those planning for or already in retirement who want to understand their cash flow. It helps you answer the question, "How much money will I have to live on each month?" If you are still determining your overall savings goal, our main retirement calculator may be a better starting point. To detail your spending, use the retirement expense calculator. For a high-level view of what makes a comfortable retirement, see what is a good retirement income.

The calculator projects your financial situation year by year. You will see charts illustrating your income versus expenses over time, how your portfolio balance changes with withdrawals, and a detailed breakdown of where your money comes from. The results help you identify potential income gaps and test strategies to create a more secure and sustainable retirement.

Begin by entering your guaranteed income sources. This includes your estimated monthly Social Security benefit, any monthly pension payments you expect, and income from annuity contracts you may have. These form the stable foundation of your retirement income.

Next, detail your investment portfolio. Enter the total balance of your retirement accounts, such as your 401(k), IRA, and brokerage accounts. Then, input the annual withdrawal rate you plan to use. This is the percentage of your portfolio you will withdraw each year for income. A common starting point is the 4% rule, which you can model with our 4% rule retirement withdrawal calculator. Finally, add the expected annual return for your investments during retirement.

Add any other income streams you anticipate. This could be net income from rental properties or earnings from part-time work. These sources can significantly reduce the pressure on your investment portfolio.

Then, outline your expenses and timeline. Enter your total estimated monthly living expenses, not including healthcare, which is handled separately in the advanced section. Also, provide your current age and planned retirement age to set the timeline for the projection. For a detailed spending plan, use the retirement budget calculator.

For a more precise projection, open the advanced settings. Here you can adjust for the long-term effects of inflation, estimate your effective tax rate on retirement income, and add your expected monthly healthcare costs. Factoring in these details provides a much more realistic outlook on your financial future.

Guaranteed Income (Social Security, Pension, Annuity)

This section covers income streams that are generally stable and predictable.

• Social Security Monthly: This is the benefit you expect to receive from the Social Security Administration. You can find your personalized estimate on the SSA.gov website. Your benefit amount depends on your earnings history and the age you file.
• Pension Monthly: If you have a defined-benefit pension from an employer, enter the fixed monthly amount you will receive.
• Annuity Income: This is the guaranteed monthly payout from an annuity contract you have purchased.

These sources are critical because they provide a reliable income floor, independent of market fluctuations.

Investment Portfolio (Balance, Return, Withdrawal Rate)

This section models the income you will generate from your savings.

• 401(k)/IRA Balance: This is the total value of all your investment accounts intended for retirement, including your 401(k), Roth 401(k), IRA, Roth IRA, and taxable brokerage accounts.
• Expected Annual Return: This is the average annual growth you expect from your portfolio in retirement. A conservative estimate, such as 4-6%, is often prudent for retirement planning.
• Annual Withdrawal Rate: This is the percentage of your portfolio you'll withdraw each year. This is a crucial input that directly impacts how long your money will last. A lower rate is more sustainable. Use the nest egg withdrawal calculator to explore different scenarios.

Other Income Sources (Rental, Part-Time Work)

Include any additional income you plan to have in retirement.

• Rental Income: Enter your net monthly income from rental properties after all expenses like mortgage, taxes, insurance, and maintenance.
• Part-Time Work Income: If you plan to work part-time, enter your expected monthly take-home pay. The calculator assumes this income continues until age 75.

Monthly Expenses & Timeline

These inputs establish the demand side of your retirement budget.

• Monthly Living Expenses: Estimate your core monthly spending on housing, food, transportation, utilities, travel, and entertainment. Do not include taxes or healthcare here. Our retirement expense calculator can help you create a detailed budget.
• Current Age & Retirement Age: These ages define the projection timeline and when income streams begin.

Advanced Settings (Inflation, Tax, Healthcare)

These inputs add layers of realism to your projection.

• Inflation Rate: This rate is used to adjust your expenses and some income sources over time, showing how your purchasing power may change.
• Effective Tax Rate: Estimate the combined federal and state tax rate on your retirement income. Remember that withdrawals from traditional 401(k)s and IRAs are typically taxed as ordinary income. Learn more about how 401(k) withdrawals are taxed.
• Monthly Healthcare Costs: This is a critical expense. Include estimated costs for Medicare premiums, supplemental plans, and out-of-pocket expenses. Use the retirement healthcare cost calculator for a more detailed estimate.

This calculator uses a year-by-year projection to model your retirement finances from your planned retirement age up to age 95.

First, if you are not yet retired, the calculator grows your current portfolio balance to your retirement age using your expected annual return. This establishes the starting balance for your retirement withdrawals.

For the first year of retirement and each subsequent year, the calculator performs a series of calculations. It totals all your gross monthly income sources: Social Security, pension, annuity, part-time work, rental income, and a withdrawal from your portfolio based on your specified rate.

Next, it adjusts certain income streams and all expenses for inflation. Social Security and rental income are assumed to increase with the general inflation rate, while healthcare costs are inflated at a higher, separate rate (5% annually) to reflect historical trends.

The calculator then applies your effective tax rate to your total gross income to determine your after-tax or "net" monthly income. It compares this net income to your total inflation-adjusted monthly expenses (living expenses + healthcare) to calculate your monthly surplus or deficit.

Finally, it updates your portfolio balance for the next year. The initial annual withdrawal is taken out, and the remaining balance grows by your expected investment return. If there's a deficit for the year, an additional withdrawal is made from the portfolio to cover the shortfall, if funds are available. This process repeats each year until the portfolio is depleted or the projection period ends. The "Income Adequacy Score" is based on how well your initial income covers your expenses.

The calculator projects your finances annually. Here are the core formulas used in the year-by-year simulation.

Pre-Retirement Portfolio Growth

If you are not yet retired, your portfolio grows until retirement age.

years to retirement = retirement age - current age
retirement starting balance = portfolio balance * (1 + expected return) ^ years to retirement

Annual Income and Expenses

Each year in retirement, income and expenses are calculated and adjusted for inflation.

inflation factor = (1 + inflation rate) ^ years since retirement
healthcare inflation factor = (1.05) ^ years since retirement

annual social security = social security monthly * 12 * inflation factor
annual rental income = rental income monthly * 12 * inflation factor
annual expenses = monthly expenses * 12 * inflation factor
annual healthcare = monthly healthcare * 12 * healthcare inflation factor
total annual expenses = annual expenses + annual healthcare

Portfolio Withdrawal

The withdrawal is based on your specified rate applied to the current balance.

annual portfolio withdrawal = current portfolio balance * (withdrawal rate / 100)

Total Income and Surplus/Deficit

All income sources are summed, taxes are applied, and the result is compared to expenses.

gross annual income = annual social security + annual pension + annual annuity + annual rental + annual part-time work + annual portfolio withdrawal
net annual income = gross annual income * (1 - (tax rate / 100))
annual surplus or deficit = net annual income - total annual expenses

Next Year's Portfolio Balance

The portfolio balance is updated based on withdrawals, growth, and any deficit coverage.

balance after withdrawal = current portfolio balance - annual portfolio withdrawal
growth on balance = balance after withdrawal * expected return
extra withdrawal for deficit = if surplus < 0, min(abs(surplus), balance after withdrawal + growth) else 0

next year's balance = balance after withdrawal + growth - extra withdrawal for deficit

A "good" monthly retirement income is highly personal and depends on your lifestyle, location, health, and financial obligations. While there's no magic number, a common guideline is the 80% rule, which suggests you'll need about 80% of your pre-retirement income to maintain your standard of living. This is because some expenses, like saving for retirement and payroll taxes, disappear.

However, your actual needs may be higher or lower. If you plan to travel extensively or have high healthcare costs, you might need 90-100% of your previous income. If you'll have a paid-off mortgage and plan a quieter lifestyle, you might be comfortable with 60-70%.

The best approach is to create a detailed retirement budget. List all your anticipated expenses, from housing and utilities to travel and hobbies. This bottom-up approach provides a much more accurate target than a simple percentage. Use our retirement cost of living calculator to see how your expenses might change if you relocate.

The goal of retirement income planning is to transform your accumulated assets into a reliable, recurring stream of cash flow, much like a paycheck. This involves strategically combining different income sources.

A popular method is the "bucket strategy," where you segment your assets based on when you'll need them.

• Bucket 1 (1-3 years): Cash and cash equivalents to cover immediate living expenses. This insulates you from short-term market volatility.
• Bucket 2 (4-10 years): A mix of bonds and conservative stocks to provide stable growth and refill Bucket 1.
• Bucket 3 (11+ years): Growth-oriented investments like stocks for long-term appreciation.

Another key component is determining the best order to withdraw from retirement accounts. A common strategy is to withdraw from taxable accounts first, then tax-deferred accounts (like a Traditional IRA or 401(k)), and finally tax-free Roth accounts. This allows your tax-advantaged accounts to grow for as long as possible. You can model this with our bucket strategy calculator.

Retirement income can be categorized into two types: guaranteed and variable.

• Guaranteed Income: This is predictable and stable. It includes Social Security, pensions, and some annuities. It forms the bedrock of your financial plan, covering essential expenses regardless of market conditions.
• Variable Income: This comes from your investment portfolio (401(k)s, IRAs, brokerage accounts). The amount you can safely withdraw depends on market performance, making it less predictable.

A balanced plan includes a healthy mix of both. Guaranteed income should ideally cover your non-discretionary needs like housing, food, and healthcare. This provides peace of mind. Variable income from your portfolio can then be used for discretionary spending like travel, hobbies, and other lifestyle goals. If your guaranteed income is low, you might consider strategies to increase it, such as delaying Social Security or purchasing an annuity.

• Income Adequacy Score: This gives you a quick snapshot of your plan's health. A high score indicates your initial projected income comfortably covers your expenses. A low score signals a potential shortfall that needs addressing.
• Summary Cards: These highlight the key numbers: your total after-tax monthly income, your total monthly expenses, and the resulting monthly surplus or deficit. The income replacement ratio shows what percentage of your expenses are covered by your net income.
• Income Breakdown Chart: This donut chart shows where your money is coming from. A well-diversified mix of sources (e.g., Social Security, portfolio, pension) is often more resilient than relying on a single source.
• Income vs. Expenses Chart: This bar chart projects your income and expenses over time. Watch for trends where the expense line (red) consistently exceeds the income line (green), as this indicates a structural deficit.
• Portfolio Balance Chart: This area chart shows the projected value of your investment portfolio throughout retirement. A gradual, gentle slope downwards is ideal. A steep, rapid decline suggests your withdrawal rate may be too high.

If the calculator shows a monthly deficit or your portfolio runs out too early, you have several levers to pull.

1. Reduce Your Withdrawal Rate: Lowering the percentage you take from your portfolio each year is one of the most powerful ways to make it last longer. Test a 3.5% or 3% rate instead of 4%.
2. Delay Social Security: If you haven't filed yet, delaying your Social Security benefits from age 62 toward age 70 can increase your monthly payment by up to 8% per year. This boosts your guaranteed, inflation-adjusted income for life. See the trade-offs in when to take social security: 62 vs 67 vs 70.
3. Lower Retirement Expenses: Review your planned budget for potential cuts. Even a few hundred dollars less per month can make a huge difference over a 30-year retirement.
4. Work Part-Time: Adding even a small amount of part-time income in the early years of retirement can significantly reduce the strain on your portfolio, allowing it to grow for longer.
5. Consider an Annuity: An annuity can convert a lump sum of your savings into another stream of guaranteed income, which can help cover essential expenses.
6. Optimize for Taxes: A high tax rate can be a major drag on your income. Strategies like a Roth conversion before retirement can help reduce your taxable income later on.

1. Ignoring Inflation: A $5,000 monthly budget today will require much more in 20 years. The calculator accounts for this, but many people underestimate its corrosive effect, especially on healthcare.
2. Forgetting About Taxes: Gross income is not what you live on. Withdrawals from Traditional 401(k)s and IRAs are taxable. Failing to account for taxes can lead to a 15-25% overestimation of your spendable income.
3. Using an Aggressive Withdrawal Rate: A high withdrawal rate (above 5%) dramatically increases the risk of depleting your portfolio, especially if a market downturn occurs early in your retirement.
4. Underestimating Longevity: Planning to live until 85 might seem reasonable, but many people live well into their 90s. Running out of money late in life is a major risk.
5. Relying Solely on Portfolio Withdrawals: A plan with diversified income streams (Social Security, pension, etc.) is far more robust than one that depends entirely on the stock market.