Pension Calculator
Social Security Retirement Estimator
Estimate your monthly US Social Security benefit based on earnings and retirement age.
Report Bug Retirement planning is the most important financial journey of your life. The Pension Calculator is designed to provide clarity on how much you need to save today to maintain your lifestyle tomorrow. By analyzing your current contributions, employer matches, and expected market returns, this tool forecasts your total retirement pot.
Understanding your "Retirement Gap"—the difference between what you will have and what you will need—is the first step toward financial independence in 2025.
📊 The Core Components of Pension Wealth
Your final pension value is influenced by three primary "levers":
1. Compounding Time: The earlier you start, the more "interest on interest" works for you.
2. Contribution Rate: The percentage of your salary diverted to 401(k) or Workplace Pensions.
3. Asset Allocation: The balance between stocks, bonds, and cash in your portfolio.
Projected Growth: Small Changes, Big Results
The following comparison shows how a consistent monthly contribution can transform into a substantial retirement fund over several decades, assuming a 7% average annual return.
*Projections are for illustrative purposes and assume a 7% annual growth rate compounded monthly.*
Mastering Your Future: Key Strategies
Retirement success is not just about the numbers; it is about the strategy you apply to those numbers:
- Maximize Employer Match: If your employer matches your contributions, this is effectively a 100% immediate return on your investment.
- Understand the 4% Rule: A common benchmark suggesting you can safely withdraw 4% of your total pot annually in retirement without running out of money.
- Inflation Hedging: Ensure your investment portfolio includes assets like equities or real estate that traditionally outpace inflation.
Frequently Asked Questions (FAQ)
1. What is the difference between a 401(k) and an IRA (US)?
A 401(k) is an employer-sponsored plan that often includes a company match and higher contribution limits. An Individual Retirement Account (IRA) is set up by you personally and offers more investment flexibility but lower annual limits.
2. How does the UK State Pension "Triple Lock" work?
The Triple Lock is a government guarantee that the UK State Pension increases each year by whichever is highest: earnings growth, inflation (CPI), or a minimum of 2.5%.
3. When can I start withdrawing my pension without penalties?
In the US, you can generally start penalty-free withdrawals at age 59½. In the UK, the private pension age is currently 55, but it is set to increase to 57 in 2028. State Pension ages vary based on your birth year.
4. Should I consolidate my old pension pots?
Consolidating can make tracking easier and potentially reduce management fees. However, check if your old plans have "Guaranteed Annuity Rates" or other special benefits that you might lose by moving the funds.
5. How much of my salary should I save for retirement?
A popular rule of thumb is the "Half Your Age" rule: Start a pension and contribute a percentage of your pre-tax salary equal to half the age you were when you started saving (e.g., if you start at 30, aim for 15%).
6. What is a "Tax-Free Lump Sum" (UK specific)?
Under current UK rules, you can usually take up to 25% of your total private pension pot as a tax-free lump sum once you reach the eligible age, while the remaining 75% is taxed as regular income when withdrawn.
