AARP Retirement Calculator - How Much to Save? (2023)

This information is for educational purposes only, it is not intended to provide specific advice. We do not guarantee the accuracy of the tool and we recommend that you consult a financial advisor regarding your particular situation.

What does the AARP Retirement Calculator do?

The AARP Retirement Calculator can give you a personalized snapshot of your financial future. Just answer a few questions about the status of your home, salary, and retirement plans, such as: IRA or 401(k). You can add information about additional retirement income (for example, pension or social security), consider how long you want to work, and think about your expected lifestyle when you retire. The tool helps you determine the amount of money you need to retire when and how you want

How much should I save for retirement?

As a general rule of thumb, when you retire you will need 10 times your income. If you are earning $100,000 at retirement, you need $1 million in savings. But that's a very rough estimate. The AARP Retirement Calculator will help you refine this estimate. The tool bases its answer on three big questions: how much time you need to save, how long you need to spend your money, and how much money you will earn.

  • The sooner you start saving for retirement, the better for you.If you start putting $5,000 a year into an IRA at age 30, you'll have about $669,400 at age 70, assuming you earn 5 percent a year. If you start at age 50, you have $186,860. Although it isIt's never too late to start savingIt's much easier if you start early. AARP's retirement calculator lets you adjust retirement ages to see how you're doing at different ages
  • You can live longer than you think.Obviously, your useful life in retirement is something you cannot know. But you have a couple of ways to appreciate it. One way to estimate is the IRSmortality tables. At 65, for example, the average person can expect to live another 22.9 years. That means half live longer and the other half don't. To be safe, it's probably best to assume that you'll live to be 90 or older. If you come from a long-lived family, 100 might be a better estimate. Use the AARP Retirement Calculator to estimate your retirement time.
  • Make reasonable investment assumptions.Your investments and their returns play an important role in your retirement portfolio. Most people invest in a mix of stocks, bonds, and short-term, ultra-safe investments like Treasury bills and bank certificates of deposit (CDs). According to Morningstar, the Chicago investment tracker, since 1929, stocks of large companies have gained an average of 9.62 percent a year, while long-term Treasury bills have risen 5.16 percent and Treasury bills 3.24 percent. (That doesn't mean they'll get the same returns for the next 93 years.)
  • What is a decent guess for your rate of return?One approach would be to assume that you earn a combination of the typical returns of an equal combination ofStocks, Bonds and CDs – just over 6 percent. Just keep in mind that very few people are experienced investors and some very wealthy investors may get a bit lucky too. Use the AARP Retirement Calculator to adjust your rate of return. Just don't overestimate your abilities or your luck.

Save as much as possible. You cannot control how long you will live in retirement or what your rate of return will be. But you can control how much you save. In the long run, this is the most important factor in how much you will have when you retire. The more you can save, the more you will have in retirement. AARP's retirement calculator will help you find the best amount to save to reach your goal

Let's say 30-year-old Emily makes $40,000 a year and her boss gives Ebenezer a 1 percent annual raise. Emily saves 1 percent of her salary because she can't afford more. Emily earns 5 percent of her money, and of course, her 401(k) plan doesn't match it. At age 70, Emily will have $57,004 saved for her retirement.

But let's say Tim, also 30, works for Ebenezer's likable nephew Fred, who starts at $40,000 a year but gives him a 3 percent annual raise every year. In addition, Fred's 401(k) plan matches 50 percent of Tim's contribution, up to a maximum of 6 percent. Inspired by this, Tim contributes 6 percent of his salary. When Tim retires, he will have $698,314 in his retirement account.

When should I retire?

It depends, the AARP retirement calculator will help you decide. However, if you want to retire early, you need a lot of money. In most cases, you can't take advantage of tax-advantaged retirement plans until you turn 59 without a 10 percent penalty. (And he owes taxes on his withdrawals at any age, unless he has a Roth IRA.) He can't get Medicare until he's 65, and his money has to last much longer than someone who retires at that age. goes. Here are other factors to consider:

Social Security

Although you can receive this benefit starting at age 62, it will be reduced unless you retire at age 62.full retirement age, which is 67 for those born in 1960 or later. (Full retirement age is the age at which you are entitled to 100% of the benefit, based on your earnings history.) Your benefit increases by 8% each year if you delay the benefit past full retirement age until you have reached age 70.​

Social security benefits areadjusted annually for inflation. That's a huge advantage, and makes the wait to collect well worth it. However, if you have health problems or have deep savings, the time off work may be worth wasting the extra money from the Social Security Administration (SSA). You can use the AARP Retirement Calculator and theAARP Social Security Calculatorto see how much you would receive from Social Security if you retire at different ages.


Maybe you're planning to retire at 70, but your body may have different ideas. And if you decide to retire before age 65, be sure to factor in the cost of private health insurance.


When most of your savings are in ittax-deferred savings accounts, like a 401(k) or IRA, you owe state and federal income taxes on the amount you withdraw. If your federal, state and local taxes are 30 percent, a $100 payment leaves you with $70 after taxes.

If you receive Social Security benefits before you reach full retirement age, the SSA may reduce your benefits. If you are a beneficiary and work in 2023 but do not reach full retirement age for a later year, the income limit is $21,240. You lose $1 in benefits for every $2 earned over the limit. So if you have a part-time job that earns $25,000 a year ($3,760 over the limit), Social Security will deduct $1,880 in benefits

Assume you reach full retirement age in 2023. In this case, the earnings limit is $56,520, with $1 in benefits withheld for every $3 earned over the limit. This applies until full retirement age is reached; Plus, there's no benefit reduction no matter how much you earn. In fact, SSA will increase your monthly benefit at that time, so over time you will recoup any benefits you lost from prior withholding.

If you receive wages, the income limit calculation is based on your gross wages. If you're self-employed, Social Security only counts your net income.

All information presented is for educational and resource purposes only. It is not intended to provide any specific or investment advice. We do not guarantee the accuracy of the tool and we encourage you to consult your adviser regarding your particular situation.

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