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Retirement Calculator

Plan your retirement savings and estimate future income needs

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Retirement Calculator: Planning for Financial Independence in 2026

The Changing Retirement Landscape

The traditional retirement model is evolving rapidly. The UK State Pension age rises from 66 to 67 between April 2026 and March 2028, whilst the average 401(k) balance in the United States reached a record $144,400 in Q3 2025. Understanding these shifting dynamics is essential for effective retirement planning.

Current retirement data (February 2026):

| Metric | United States | United Kingdom | |--------|--------------|----------------| | Full State/Social Security Benefit | $2,071/month ($24,852/year) | £241.30/week (£12,548/year) | | Average 401(k)/Pension Balance | $144,400 | £39,600 (workplace pension) | | State Pension Age | 67 (full retirement) | 66 → 67 (2026-2028) | | Average Actual Retirement Age | 62 (men), 60 (women) | 64 (men), 63 (women) | | Safe Withdrawal Rate (2026) | 3.9% (Morningstar) | 3.5-4% (conservative) |

Sources: SSA, GOV.UK, Fidelity

The gap between State Pension/Social Security and actual living expenses underscores the importance of personal savings. Social Security replaces only approximately 40% of pre-retirement income for average earners.

Contents

Calculator Guide

The Current Age and Target Retirement Age fields define the accumulation period. Each additional working year provides three benefits: more contributions, longer compounding and fewer withdrawal years.

Current Retirement Savings represents the total across all accounts (401(k), IRA, pension, ISA). This becomes the foundation for projected growth.

Annual Contribution includes personal and employer contributions. The average US contribution rate is 7.7% of salary, with total contributions (including employer match) averaging 12%. Maximising employer matching represents immediate 50-100% returns.

Expected Rate of Return should use real (after-inflation) rates for inflation-adjusted projections. Historical equity returns average 7% real; balanced portfolios (60/40) return approximately 4-5% real.

Other Retirement Income includes State Pension, Social Security, defined benefit pensions, annuities and rental income. These guaranteed income sources reduce required portfolio withdrawals.

Withdrawal Rate determines sustainable spending. The traditional 4% rule is being revisited; Morningstar's 2026 analysis suggests 3.9% for new retirees, whilst the rule's creator now advocates 4.7% based on updated research.

Results display:

  • Projected portfolio at retirement
  • Annual withdrawal amount
  • Total retirement income
  • Gap analysis if target falls short
  • Required contribution adjustments

Three Retirement Scenarios

Scenario 1: Traditional Retirement at 67

Profile:

  • Current Age: 45
  • Retirement Age: 67 (22 years)
  • Current Savings: $144,400 (national average)
  • Annual Contribution: $24,500 (2026 maximum)
  • Expected Return: 6% (real)
  • Social Security: $2,071/month ($24,852/year)

Projection:

Current Savings Growth: $144,400 × (1.06)^22 = $521,419

Contribution Growth: $24,500 × [(1.06)^22 - 1] / 0.06 = $1,051,847

Total Portfolio: $1,573,266

Annual Withdrawal (4%): $62,930

Total Retirement Income: $62,930 + $24,852 = $87,782/year

This scenario achieves comfortable retirement with full Social Security plus investment income.

Scenario 2: UK State Pension Age Transition

Profile:

  • Current Age: 55
  • Birthday: 6 April 1970
  • State Pension Age: 67 (new rules)
  • Current Pension Pot: £250,000
  • Annual Contribution: £20,000
  • Expected Return: 5% (real)
  • State Pension: £241.30/week (£12,548/year)

Projection:

Current Savings Growth: £250,000 × (1.05)^12 = £448,808

Contribution Growth: £20,000 × [(1.05)^12 - 1] / 0.05 = £318,769

Total Portfolio: £767,577

Annual Withdrawal (3.5%): £26,865

Total Retirement Income: £26,865 + £12,548 = £39,413/year

This exceeds the UK median retirement income of approximately £30,000, positioning the retiree comfortably.

Scenario 3: FIRE Movement Early Retirement

Profile:

  • Current Age: 35
  • Target Retirement Age: 50 (15 years)
  • Current Savings: $200,000
  • Annual Contribution: $50,000 (high savings rate)
  • Expected Return: 7% (real, equity-heavy)
  • Annual Expenses: $50,000
  • Required Portfolio (25× expenses): $1,250,000

Projection:

Current Savings Growth: $200,000 × (1.07)^15 = $551,632

Contribution Growth: $50,000 × [(1.07)^15 - 1] / 0.07 = $1,256,401

Total Portfolio: $1,808,033

Withdrawal Rate: $50,000 / $1,808,033 = 2.77%

This ultra-conservative withdrawal rate positions the portfolio for a 50+ year retirement with high probability of success, even without Social Security until age 67.

State Pension and Social Security in 2026

UK State Pension Changes

The 2026/27 State Pension increases by 4.8% under the triple lock guarantee:

| Pension Type | 2025/26 Weekly | 2026/27 Weekly | Annual 2026/27 | |--------------|----------------|----------------|----------------| | New State Pension (full) | £230.25 | £241.30 | £12,548 | | Basic State Pension | £176.45 | £184.90 | £9,615 |

Source: GOV.UK, The People's Pension

Qualification Requirements:

  • 35 qualifying years of National Insurance contributions for full new State Pension
  • Minimum 10 qualifying years for any State Pension

Tax Considerations: The 2026/27 full State Pension of £12,548 sits just £22 below the personal allowance (£12,570), meaning those with only State Pension income remain below the tax threshold. However, Martin Lewis warns that future increases may push State Pension above the personal allowance, creating new tax liabilities for pensioners.

US Social Security 2026

Social Security benefits increase by 2.8% COLA in 2026:

| Benefit Category | 2025 Average | 2026 Average | Maximum 2026 | |------------------|--------------|--------------|--------------| | Retired Worker | $2,015/month | $2,071/month | $5,251/month | | Couple (both receiving) | ~$3,400/month | ~$3,495/month | Varies |

Key 2026 Changes:

  • Earnings limit (early retirees): $24,480
  • Maximum taxable earnings: $184,500
  • Full retirement age: 67 (for those born 1960+)

Only approximately 6% of covered workers earn enough to qualify for maximum benefits.

The 4% Rule: Updated Research

Original Rule Evolution

Bill Bengen, creator of the 4% rule, has updated his research with important revisions:

| Retirement Duration | Safe Withdrawal Rate | Required Portfolio (for £40k/year) | |--------------------|---------------------|-----------------------------------| | 30 years | 4.7% (Bengen 2025) | £851,064 | | 30 years | 3.9% (Morningstar 2026) | £1,025,641 | | 40 years | 4.2% (Bengen estimate) | £952,381 | | 50 years | 3.5% (FIRE conservative) | £1,142,857 |

Source: Morningstar, CNBC

Morningstar's 2026 Analysis

Morningstar's annual withdrawal rate study suggests:

  • Conservative starting rate: 3.9%
  • Flexible spending approach: Up to 5.7% (adjusting withdrawals based on portfolio performance)

The lower rate reflects current elevated equity valuations and bond yields. Higher rates require willingness to reduce spending during market downturns.

Application by Age

| Retirement Age | Years in Retirement | Recommended Rate | |----------------|--------------------|--------------------| | 67 | 25-30 | 4.0-4.7% | | 60 | 30-35 | 3.5-4.0% | | 55 | 35-40 | 3.2-3.5% | | 50 | 40-45 | 3.0-3.2% | | 45 | 45-50 | 2.8-3.0% |

FIRE Movement: Early Retirement Planning

The 25× Rule

FIRE (Financial Independence, Retire Early) adherents typically target portfolios equal to 25× annual expenses:

Example:

  • Annual Expenses: £40,000
  • Target Portfolio: £1,000,000
  • Withdrawal Rate: 4%

FIRE Variations

| FIRE Type | Annual Expenses | Target Portfolio | Lifestyle | |-----------|-----------------|------------------|-----------| | Lean FIRE | £20,000-30,000 | £500,000-750,000 | Minimalist | | Regular FIRE | £40,000-60,000 | £1,000,000-1,500,000 | Moderate | | Fat FIRE | £100,000+ | £2,500,000+ | Affluent | | Coast FIRE | Variable | Enough to coast | Semi-retirement | | Barista FIRE | Variable | Partial | Part-time work |

Savings Rate Impact

| Savings Rate | Years to FIRE (from £0) | Assumes 7% Return | |--------------|------------------------|-------------------| | 10% | 51 years | Traditional timeline | | 25% | 32 years | Accelerated | | 50% | 17 years | Aggressive | | 70% | 9 years | Extreme | | 80% | 6 years | Ultra-aggressive |

Source: Vanguard FIRE Analysis

Early Retirement Challenges

The Bridge Period: Those retiring before State Pension/Social Security eligibility face a "bridge period" requiring full living expenses from personal savings:

  • UK State Pension starts at 67 (rising to 68)
  • US Social Security full benefits at 67
  • Early claiming (US: 62) reduces benefits by up to 30%

Example: Retiring at 55 with £40,000 annual expenses and State Pension at 67 requires 12 years × £40,000 = £480,000 just for the bridge period, before any post-67 portfolio.

The State Pension Age Transition

UK 2026-2028 Transition

The State Pension age rises from 66 to 67 between April 2026 and March 2028:

| Birth Date | State Pension Age | Retirement Date | |------------|-------------------|-----------------| | Before 6 April 1960 | 66 | Already eligible | | 6 April 1960 - 5 May 1960 | 66 years 1 month | May 2026 | | 6 May 1960 - 5 June 1960 | 66 years 2 months | July 2026 | | ... | Increases by 1 month | Progressive | | 6 March 1961 onwards | 67 | March 2028+ |

Source: Age UK

Future Increases Under Consideration

The 2026 State Pension age review may accelerate the rise to 68:

  • Current legislation: 68 between 2044-2046
  • Potential acceleration: 68 as early as 2038-2043

Health Inequality Concerns

Health Foundation research highlights that healthy life expectancy in the UK averages 63 years—four years before the rising State Pension age. This creates particular challenges for those in physically demanding occupations or poorer health.

Retirement Savings Benchmarks

Fidelity's Savings Guidelines

Fidelity's benchmarks suggest saving multiples of annual salary:

| Age | Target Savings | Salary £50,000 Example | |-----|----------------|------------------------| | 30 | 1× salary | £50,000 | | 40 | 3× salary | £150,000 | | 50 | 6× salary | £300,000 | | 60 | 8× salary | £400,000 | | 67 | 10× salary | £500,000 |

Current Reality vs. Benchmarks

Average 401(k) balances show most Americans fall short:

| Age | Fidelity Target | Average Balance | Median Balance | Gap | |-----|-----------------|-----------------|----------------|-----| | 30-39 | 3× salary | $55,749 | $21,752 | Significant | | 40-49 | 6× salary | $125,837 | $42,345 | Large | | 50-59 | 8× salary | $207,874 | $62,843 | Substantial | | 60-69 | 10× salary | $239,706 | $72,923 | Critical |

The median balance is far more telling than the average—half of Americans approaching retirement have less than $73,000 saved.

2026 Contribution Opportunities

Enhanced contribution limits for 2026:

| Category | 2025 Limit | 2026 Limit | |----------|------------|------------| | 401(k) Standard | $23,500 | $24,500 | | Catch-Up (50+) | $7,500 | $8,000 | | Super Catch-Up (60-63) | — | $11,250 | | Maximum (60-63) | $31,000 | $35,750 |

The new "super catch-up" provision allows workers aged 60-63 to accelerate retirement savings substantially.

How This Calculator Works

Future Value of Current Savings:

FV_principal = currentSavings × (1 + returnRate)^yearsToRetirement

Future Value of Contributions:

FV_contributions = annualContribution × [((1 + returnRate)^years - 1) / returnRate]

Total Portfolio:

totalPortfolio = FV_principal + FV_contributions

Annual Withdrawal:

annualWithdrawal = totalPortfolio × withdrawalRate

Total Retirement Income:

totalIncome = annualWithdrawal + otherIncome

Savings Target (for desired income):

target = (requiredIncome - otherIncome) / withdrawalRate

All calculations execute locally within the browser.

Sources

FAQs

What is the UK State Pension amount for 2026/27?

The full new State Pension increases to £241.30 per week (£12,548 annually) from April 2026, a 4.8% increase under the triple lock. The basic State Pension (old system) rises to £184.90 per week. Full new State Pension requires 35 qualifying years of National Insurance contributions.

What is the average Social Security benefit in 2026?

The average retired worker will receive $2,071 monthly ($24,852 annually) starting January 2026, following a 2.8% COLA increase. The maximum benefit is $5,251 monthly, though only approximately 6% of workers earn enough to qualify.

Is the 4% rule still valid for 2026?

Research suggests nuanced application. The rule's creator, Bill Bengen, now advocates 4.7% for 30-year retirements based on updated analysis. Morningstar's 2026 study suggests 3.9% as a conservative starting point. For early retirement (40+ years), rates of 3-3.5% are more appropriate.

When does the UK State Pension age rise to 67?

The State Pension age increases from 66 to 67 between April 2026 and March 2028. Those born before 6 April 1960 retain the 66 age. Those born after 6 March 1961 face the full 67 age. The transition occurs gradually by birth month during this period.

How much should be saved by retirement age?

Fidelity recommends 10× annual salary by age 67. For £50,000 salary, this equates to £500,000. Combined with State Pension/Social Security, this typically supports comfortable retirement. However, median actual balances fall significantly short of these benchmarks.

What are the new 2026 401(k) contribution limits?

The standard limit increases to $24,500 (from $23,500). Catch-up contributions for those 50+ rise to $8,000. A new "super catch-up" allows those aged 60-63 to contribute $11,250 additional, for a total maximum of $35,750.

How does FIRE movement retirement differ from traditional?

FIRE (Financial Independence, Retire Early) targets retirement in one's 30s-50s rather than 60s-70s. This requires savings rates of 50%+ (versus traditional 10-15%), portfolios of 25× annual expenses, and more conservative withdrawal rates (3-3.5%) due to longer retirement duration.

What is the "bridge period" in early retirement?

The period between early retirement and State Pension/Social Security eligibility. Someone retiring at 55 with State Pension at 67 faces a 12-year bridge requiring full expenses from personal savings. This bridge period must be explicitly planned and funded.

How does healthy life expectancy affect retirement planning?

UK healthy life expectancy averages 63 years—below the rising State Pension age of 67. This creates challenges for those in physically demanding occupations who may be unable to work until State Pension age yet cannot access benefits.

Should home equity be included in retirement calculations?

Generally not, unless specific plans exist to downsize or utilise equity release. Primary residences provide housing security but are not liquid assets for withdrawal-based income. Separate rental properties generating income may be included as "other income."