Retirement Paycheck Calculator

Enter total savings intended to support retirement spending. Add monthly Social Security, pension, and other income separately. Avoid counting an income source twice—for example, do not include a pension’s present value in total savings and also add its monthly payment.

Expected return is the assumed annual portfolio growth. Retirement years sets the modeled payout horizon. Inflation affects the purchasing power of future income; the calculator may show a nominal amount that does not rise as quickly as prices. Tax rate is a simplifying estimate rather than a personalized tax calculation.

Current age provides context for the timeline, but it does not itself determine Social Security eligibility or required distributions. Social Security claiming age affects benefit size; use a personal estimate from the Social Security Administration.

For income planning around a workplace account, compare your savings and contributions with the 401(k) paycheck impact calculator. A pension withdrawal calculator can help isolate pension-related choices.

One common way to convert a balance into a fixed annual payment is to amortize it over a set number of years while assuming a constant return. At the defaults, the annual payment that exhausts $500,000 over 30 years at 5% is approximately $32,505:

Annual portfolio payment
= savings × annual return ÷ [1 − (1 + annual return)^−years]
= $500,000 × 0.05 ÷ [1 − 1.05^−30]
≈ $32,505 per year

Convert that amount to monthly income:

Monthly portfolio payment = $32,505 ÷ 12
≈ $2,708.75

Add the default $2,000 monthly Social Security payment:

Gross monthly income = $2,708.75 + $2,000
= $4,708.75

If the 15% tax assumption is applied to all gross income as a simplified illustration:

Estimated after-tax monthly income = $4,708.75 × (1 − 0.15)
≈ $4,002.44

The portfolio-only initial withdrawal rate in this example is:

Withdrawal rate = $32,505 ÷ $500,000 × 100
≈ 6.50%

A 6.50% withdrawal rate is not automatically sustainable. This example assumes a smooth 5% return and level nominal withdrawals. Real returns vary, and actual taxes differ by account type and income source. The calculator’s actual displayed paycheck may differ if it uses another method.

The level-payment example uses a present-value annuity formula:

Annual portfolio payment
= portfolio balance × annual return
  ÷ [1 − (1 + annual return)^−retirement years]

Monthly income combines regular portfolio withdrawals and other income:

Gross monthly income
= monthly portfolio payment
  + Social Security
  + pension
  + other monthly income

A simplified after-tax estimate applies the tax-rate input:

Estimated after-tax monthly income
= gross monthly income × (1 − tax rate)

The portfolio withdrawal rate compares the first-year annual portfolio withdrawal with the starting balance:

Withdrawal rate
= annual portfolio withdrawal ÷ starting savings × 100

These formulas explain one conventional model. They do not establish that the calculator’s component uses the exact same payout method. Check the displayed definitions and results, particularly whether its tax rate applies to portfolio withdrawals alone or all income.

A monthly retirement paycheck can be level in nominal dollars or adjusted over time. Level nominal income is easier to calculate, but its purchasing power usually falls as prices rise. Inflation-adjusted withdrawals preserve more purchasing power if the portfolio can support them, but may require a larger starting balance or lower initial payment.

The sequence of investment returns matters. Two portfolios can earn the same average return over 30 years but produce different outcomes if one experiences losses early while withdrawals continue. A constant-return estimate cannot show this sequence risk. Test lower returns, longer retirements, and smaller withdrawals as stress scenarios.

The tax-rate field is not a substitute for tax planning. Traditional 401(k) and IRA distributions are generally taxable as ordinary income; Roth distributions may receive different treatment when applicable requirements are met. Social Security taxation depends on combined income. The IRS discusses retirement income taxation at irs.gov/taxtopics/tc410. For an account-specific view, use a 401(k) withdrawal calculator or IRA withdrawal calculator.

For many account owners, required minimum distributions generally begin at age 73 under current law, although exceptions and account-specific rules apply. See the IRS overview of required minimum distributions. RMDs are a tax rule, not necessarily the amount you need to spend.

The following table uses the same level-payment formula as the example. It changes one input at a time; figures are approximate and do not include Social Security, taxes, or inflation adjustments.

A larger balance raises the modeled payment. A lower return reduces it when the payout is calculated to exhaust the account over a fixed term. A shorter payout term permits a larger payment but leaves less protection against living longer than the selected period.

Compare a portfolio-only paycheck with guaranteed income, such as an annuity or pension, before making a decision. An annuity calculator can estimate a contract’s payment, while a retirement annuity calculator can help compare income options.

Compare estimated retirement income with the spending plan you expect to follow. Try lower return assumptions, a longer retirement, and a higher inflation rate before relying on a single paycheck estimate. If you want to understand how income sources fit together, use the retirement income calculator and review how to withdraw from retirement accounts tax-efficiently.