Retirement Savings Calculator — 401k, IRA and Roth (2026)

The rule originates with financial adviser William Bengen, who tested historical US market data to find the highest first-year withdrawal rate that would have survived 30 years in every historical period, including retirements beginning at the worst possible moments. That worst-case figure was roughly 4%, and it was based on a portfolio of large-cap US stocks and intermediate-term bonds.

Bengen has since revised his own conclusion. In 2025 he published updated analysis putting the worst-case rate — his SAFEMAX — at 4.7% for a more diversified portfolio including small-cap and international equities, and suggested that 5.25% to 5.5% is a reasonable estimate for current retirees willing to stay flexible.

Morningstar, working from forward-looking capital market assumptions rather than historical averages, reached a materially different figure: 3.9% as the starting rate for someone retiring in 2026 seeking steady inflation-adjusted spending over 30 years with a 90% success probability.

These are not sloppy numbers in conflict. They answer slightly different questions using different methods — historical worst case versus forward-looking probability, different portfolios, different definitions of acceptable failure. The honest conclusion is that the safe rate sits somewhere around 4%, with real uncertainty either side.

Two retirees can experience the same average return over thirty years and end with entirely different outcomes, depending purely on the order in which those returns arrived. This is sequence-of-returns risk, and it is the most under-appreciated hazard in retirement planning.

The mechanism is that withdrawals during a decline sell more shares to raise the same cash, permanently reducing the base that must recover. A bad decade at the start of retirement is far more damaging than the identical decade at the end, even though the average return is unchanged.

The practical defences are straightforward. Hold one to three years of spending in cash or short-term bonds so you are not forced to sell equities into a downturn. Reduce discretionary spending in bad years rather than mechanically increasing withdrawals with inflation. And avoid an all-equity portfolio in the years immediately around retirement, when the exposure is at its most consequential.

Savings rate and time dominate everything else, and by a wide margin. Someone saving 20% of income from age 25 will almost certainly retire comfortably across any plausible return assumption. Someone saving 5% from age 45 will not, regardless of how well they pick investments.

This is worth stating plainly because attention tends to flow to the variables that feel controllable and interesting — fund selection, market timing, withdrawal-rate precision — rather than the one that is boring and decisive.

Fees are the quiet exception worth acting on. A one percentage point difference in annual expenses compounds into a very large sum over several decades, and unlike returns it is entirely within your control.

Capture the employer match —

an immediate guaranteed return, typically 50–100% on the matched portion. Nothing else available offers this.

Raise the savings rate —

the single most powerful lever. Directing future raises to savings increases the rate without reducing current spending.

Start earlier —

time sits in the exponent. Ten years of early contributions can outweigh thirty later ones.

Reduce fees —

controllable, compounding, and frequently ignored. Check the expense ratios of every fund you hold.

Delay Social Security —

benefits increase for each year claiming is deferred past full retirement age up to 70, which is effectively inflation-protected longevity insurance.