Financial tools

We created some tools for you to answer commmon financial questions.

How much money do I need to retire now?

$
USD
We adjust for inflation, such that your buying power remains constant from the moment you retire.
As a reference, The average life expecentancy in the United States for males is 74.5 years and for females 80.2 years. Assuming you don't want to be in a situation in which you don't have any money.
The S&P 500 has an average return of 10% to 11% over the last 50 years. This includes dividendds. US Treasury returned on average 4% to 6%. The default value of 7% is a good starting point.

You need $.... to retire.

The calculation

To calcuate the amount of money you need to retire, we used the following formula:PV = P * [(1 - (1 + r)^-n) / r]Where:

PV =
Present Value (the amount you need today)
P =
Annual payment (inflation-adjusted withdrawal amount)
r =
Effective annual rate (net return after accounting for inflation) calcualted as:
r = (1 + Return on investment) / (1 + Inflation rate) - 1
n =
Number of years of retirement

To derive the above number, we assume the following:

  • You make your first payment to yourself the moment you retire. If you only start paying yourself at the end of the first year in retirement, you can deduct your yearly budget from the amount you need to retire.
  • You spend the same amount of money every year.
  • Your return on investments and the inflation rate are constant throughout the entire period.