Freedom Calculator

Retiring a year earlier means your whole portfolio has to be ready a year sooner, not just that one more year of spending is paid for. If you were on track for $1.5 million (in today's purchasing power) at 65, you'd have about $1.40 million at 64, because the portfolio would still have had a year left to grow. The gap at 64 is about $95,000, much more than one year of spending ($60,000).

Funding that gap today costs about $6,442. Funding one year of spending costs about $4,049. Both are correct, they just answer different questions. And the $6,442 figure only holds if you really are on track for 65 and would add nothing in that last year; "My actual savings path" checks against your own numbers.

Prices tend to rise, so a dollar decades from now buys less than a dollar today. Figures in today's purchasing power (also called inflation-adjusted or real) take that out, so you can compare them with prices you know now. At 3% inflation, prices are about 3.36 times higher after 41 years, so $199,141 at age 64 buys about what $59,270 buys today.

The calculator takes inflation out by dividing: real growth is (1 + return) ÷ (1 + inflation). Simply subtracting inflation from the return is a common shortcut, and it overstates growth slightly.

No. 10% a year before inflation is an optimistic illustration, close to the long-run average of U.S. stocks. Actual returns swing widely from year to year, include losing years, and can stay below average for a decade or more. No investment return is guaranteed, and the SEC warns investors to be wary of anyone who promises one (Investor Bulletin: Performance Claims).

Try a lower return to see a more cautious picture, or open the return scenarios.

It's a rule of thumb from research on historical U.S. market returns: withdraw 4% of your portfolio in the first year of retirement, then raise that dollar amount with inflation each year. It was studied for retirements of about 30 years. That's where "25 times your spending" comes from.

It can fall short with a longer retirement (retiring early makes it longer), poor returns early in retirement, high fees, or spending that jumps unexpectedly. A lower withdrawal rate needs a bigger portfolio but leaves more room for bad luck.

Growth compounds: each year's growth earns its own growth the next year. At 10% returns and 3% inflation, money roughly doubles in buying power every 10.5 years. $4,000 invested at 23 has 41 years to grow before 64 and reaches about $59,270 in today's purchasing power. The same $4,000 invested at 43 has 21 years and reaches about $15,900, roughly a quarter as much.

Open "Personalize my plan" and choose "My actual savings path". Enter what you have invested and what you add each month. The calculator projects your balance in today's purchasing power, finds when it reaches your goal, and shows how much more today would move that date earlier. If your path doesn't reach the goal by your chosen age, it shows the full gap instead of calling it the cost of retiring a year earlier.

Those two numbers never leave your browser and are never added to the share link.

Yes. Choose "For my child" at the top of the settings and enter their age, from 0. The main result then shows what you could invest for them today to give them an extra year of freedom: it moves their retirement goal a year earlier (or more, if you choose), assuming the money stays invested untouched until then and that they would otherwise be on track. A newborn has the most years of compounding ahead, so the amount is smallest then.

Account types, taxes and who controls the money are not covered.

Because the return compounds over decades. Over 41 years, the difference between 10% and 8% returns (with 3% inflation) roughly halves what $4,000 grows to in today's purchasing power: from about $59,270 to about $27,930. Small changes in the assumed return add up to big changes in the result, which is why it's worth looking at the scenarios rather than one number.

No. This first version leaves out taxes, investment fees, healthcare costs, Social Security and pensions, and the ups and downs of real markets. Fees lower your effective return. Social Security or a pension lowers how much your portfolio has to cover. Treat the results as a way to understand the trade-off, not as a plan.

No. It's an educational illustration built on simple, stated assumptions. For decisions about your own money, consider talking to a qualified, fee-only financial professional.