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Retirement Savings Calculator

The Scottrade retirement calculator helps you determine the impact of different savings scenarios on the likelihood that your retirement savings will last until your self-selected age (duration). These calculations are based on your current savings and how much you plan to contribute each year until retirement. By changing the various inputs such as "Annual Contributions," "Asset Allocation," "Annual Expenses," and "Additional Annual Revenue During Retirement," you can gauge the length of time that your assets may last during retirement.

Based on your retirement savings plan with a Moderate Growth investment asset allocation, and retiring at age 65 with annual expenses in today's dollars of $75,000, your plan is projected to fund your retirement goals 66% of the time.

Annual Contributions (include employer match where appropriate
Current Retirement Savings
Current Investment Asset Allocation
Additional Annual Revenue During RetirementOptional
Social Security
$
Part-time Income
$
Other
$
To increase the likelihood of staying on track, it might help to take these additional steps:
  • Increase your annual contributions
  • Retire later
  • Reduce Annual Expenses During Retirement
  • When you retire, supplement your income with Additional Revenue During Retirement
  • Put more assets into your retirement (e.g., downsize your house)
  • Lower your Duration age
  • Change your Investment Asset Allocation
For details on criteria, calculations, limitations and assumptions used, please see:

Calculations & Assumptions
Need help? Visit www.irs.gov

IMPORTANT: The projections or other information generated by the Retirement Calculator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.

This calculator is for informational purposes only and should not be considered investment advice. The results presented by this calculator are hypothetical and may not reflect the actual growth of your own investments. Scottrade is not responsible for the consequences of any decisions or actions taken as a result of information provided by this tool. Scottrade is not responsible for any human or mechanical errors or omissions. Please consult a tax, legal, or financial advisor with questions regarding your investment objectives and personal tax or financial situation.

The information and content provided in the Scottrade® Knowledge Center is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.

Calculations & Assumptions

Retirement Calculator Assumptions:
  • Monte Carlo Simulation
    • Monte Carlo simulation uses a random number function to select an annual portfolio return for every year between your Current Age to the selected Duration. It applies the ‘simulated’ annual portfolio return to each annual balance until the Duration age is achieved – this process constitutes one simulation run. The process is then repeated 500 times. By simulating the portfolio over time and multiple scenarios, you get a sense of how well the portfolio reacts under different market conditions while providing a level of confidence your portfolio will meet your retirement goal.
    • Once retirement age is reached, annual contributions stop and you start withdrawing the Annual Expenses During Retirement, less Additional Annual Revenue During Retirement.
    • Based on the 500 runs, a success rate is calculated by looking at the final balance of the total portfolio. If this balance is positive, that run is considered a success.
  • Understanding the Chart
    • The tan line represents the 25% percentile level, meaning that for the highlighted age, the total portfolio balance was greater than or equal to this value in 125 out of 500 simulations, producing a 25% confidence level.
    • The dark purple line represents the 50th percentile, meaning that for the highlighted age, the total portfolio balance was greater than or equal to this value in 250 out of 500 simulations, producing a 50% confidence level.
    • The blue line represents the 75th percentile meaning, that for the highlighted age, the total portfolio balance was greater than or equal to this value in 375 out of 500 simulations, producing a 75% confidence level.
    • The area between the 25th and 75th percentile lines represents the most likely total portfolio balance for the highlighted age.
  • Withdrawals
    • The order of withdrawal of funds for retirement starts in the taxable account, followed by the tax-free account, and, lastly, tax-deferred.
    • The withdrawal amount is fixed for each year based on the Annual Expenses During Retirement.
  • Taxes
    • Investment Tax rate is only applied to the taxable portfolio.
    • In any year there is a negative return generated during the simulation, investment taxes will not be deducted from the taxable portfolio since losses are not offset in the calculator.
    • The Income Tax Rate is the combined Federal and State marginal tax rate and is applied to withdrawals and income when retirement age is reached.
  • Dollar amounts
    • All dollar amounts are shown in today’s dollars, however the calculator deducts the inflation rate from the annual return so that the effects of inflation are incorporated into the final results.
  • Additional Annual Revenue
    • The initial total sum of Social Security, Part-time and Other income is used to offset the Annual Expenses During Retirement each year in the simulation.
  • Inflation
    • A constant 3.55% historical rate was calculated as the average year over year inflation rate in the Consumer Price Index (CPI-U).
  • Investment Style
    • The table provides the five asset allocation choices and the composition of the underlying portfolios:

       

      Large Cap US StocksMid Cap US StocksSmall Cap US StocksInternational StocksBondsCash Equivalents
      Conservative16%4%2%8%58%12%
      Balanced23%7%5%15%43%7%
      Moderate29%10%8%23%28%2%
      Growth34%12%10%29%13%2%
      Aggressive36%15%13%34%0%2%
  • Success Rate : on Track / off Track
    • To determine which path your retirement plan is on we add all simulation runs with an ending positive balance and divide this total by 500, the number of simulations. A 50% success rate or greater is deemed as being on track while anything short of that is off track.