Retirement Calculator 2026 — Better Than Dave Ramsey’s (Tax-Aware)

The When Can I Retire Calculator

My retirement calculator asks you three questions:

1. How much do you have?
2. What’s your yearly savings?
3. How much do you want spend in retirement?

When you answer them, the calculator will answer the four key questions about your retirement:

1. How much do I need to retire?
2. How much do I still need to save for retirement?
3. When can I retire?
4. How long will my retirement savings last?

This retirement calculator already has market assumptions baked in. But you can also adjust to see how they impact results.

I haven’t found any retirement calculators out there that is quite this simple. And since I love Dave Ramsey, I’m calling this my Better Than Dave Ramsey Retirement Calculator.

What Makes This Calculator Different

Tax-Aware: Most calculators ignore taxes. This one factors in federal income tax, state income tax (based on your state), and property taxes on your home.

Housing-Smart: Tell us if you own a home (we’ll add property tax to your expenses), if you’re planning to buy (we’ll calculate your mortgage payment and subtract your down payment), or if you’ll rent (include rent in your spending).

Account Type Matters: Whether you have a Roth IRA, traditional 401k, or taxable brokerage affects how much tax you’ll pay in retirement. The calculator now assumes a realistic “Mixed” portfolio: 25% Roth (tax-free) + 25% Taxable (only gains taxed) + 50% Pre-Tax (fully taxed).

Understanding the Account Types

100% Roth: Best case – all withdrawals are tax-free. You already paid taxes when you contributed.

100% Taxable: Only your investment gains are taxed (at favorable long-term capital gains rates of 0-20%). Your original contributions (cost basis) come out tax-free. Typically ~50% of withdrawals are gains.

100% Pre-Tax: Worst case for taxes – every dollar withdrawn is taxed as ordinary income. This includes traditional 401k and traditional IRA.

Mixed (Typical): Most people have a blend. We assume 25% Roth + 25% Taxable + 50% Pre-Tax, which results in about 60% of your withdrawals being taxable.

Retirement Calculator Explained

Your retirement plan hinges on the answers of these four questions.

1. How much money do I need to retire?
2. How much money do I need to save for retirement?
3. When can I retire?
4. How long will my retirement savings last?

Let’s go over how they impact your ability to retire, one by one.

Question #1: How much money do I need to retire?

Whenever someone asks you “how much money”, they’re asking for your net worth.

This retirement calculator takes into account both your estimated retirement expenses, and the withdraw rate, to calculate how much money you need to retire.

Below is at table that shows how your retirement number in the middle, and how it can vary wildly depending on your retirement expenses (first column) and withdrawal rate (first row).

Remember: if your expenses is $100K, it means you get $100K to play with. Some of that $100K may need to be paid to taxes if you are taking it out of a retirement account where the money has grown over time.

If you want to spend $100K a year during retirement, plan to save somewhere between $2.5M to $3.33M.

Example: My family plans to spend $11K per month in retirement, and we’ll be taking it out our retirement account where capital gains tax is assumed to be 20%. Therefore, I expect to spend $132,000 (11,000*12) but I’ll assume 25% of my money will be paid to taxes, so in reality, we need $176,000 (132,000 / 0.75) per year. I use the conservative 3% withdraw rate. This means I’ll need $5.87 million (170,000/0.03) in net worth before I can retire.

Question #2: How much money do I need to save for retirement?

To understand how much money you need to save still, you need to know how much money do you have today.

This is a net worth question, and you can find yours using Personal Capital.

I use Personal Capital to track my net worth and monthly expenses and savings.

I also wrote a blog post about Personal Capital if you want to check it out.

Once you understand your current net worth, expense and savings, the retirement calculator will help you figure out the rest.

Example: our net worth right now is $3.8 million using personal capital.

Question #3: When can I retire?

You can retire when you have hit your retirement net worth goal.

The more you save, the earlier you can retire.

The chart below varies savings per month, and looks at its impact on number of years until retirement. With other variables staying constant.

Our retirement calculator shows if you bump your saving from $667 per month to $1,333 per month, you can retire 12 years earlier.

That’s right: a decade of no work if you can conjure up $600 more per month.

Example: our net worth is $3.8M, we need $5.87M to retire – that is we still need to save another $2.07M.

Question #4: How long will my retirement savings last?

Once you retire, your retirement savings should last you at least two decades.

But if you are retiring earlier in life, you might want to make your retirement savings last longer.

How do you do that? Well, you can do some part-time work or simply spend less money.

In this retirement calculator, we used a fairly conservative method.

So if you see that your retirement savings can last you 25 years, it can likely last you longer because we are assuming your spending will stay the same as you age, whereas most models assume your spending will decrease.

If you want to be conservative, simply lower your withdraw rate from 4% to 3% or even 2.5%.

How Taxes Affect Your Retirement Number

This calculator now factors in three types of taxes:

Federal Income Tax: Based on 2025 tax brackets. Roth withdrawals are tax-free, traditional 401k/IRA is fully taxed, and taxable accounts get favorable long-term capital gains rates (0-20% depending on income).

State Income Tax: Varies dramatically by state. Texas, Florida, Washington, Nevada, and Tennessee have no state income tax. California and Oregon can take 9%+ of your income.

Property Tax: If you own a home, property taxes are an ongoing expense. New Jersey averages 2.4% of home value annually, while Colorado is only 0.55%.

Market Adjustment inside the Retirement Calculator

Of course, market conditions also influence how fast you can retire.

But remember: this is something you largely cannot control.

In life, we know that your success is a combination of luck and hard work. Think of market conditions as luck.

If you live in the United States, you are already pretty lucky. So don’t push your luck too far by betting everything you have on a single stock or cryptocurrency.

Remember: slow and steady wins the race.

Go slow but remain steady.

Invest index funds and have your success be guaranteed by the hard work of consistently saving money.

Annual investment return

In general, I still recommend that people invest their money into index funds.

The United States stock market has steadily returned on average 7% since its beginning (after inflation). To see the power of compound growth on your portfolio, try our compound interest calculator.

Assuming you won’t allocate 100% of your investment into the stock market, we can assume that your average real investment return is somewhere between 5% to 7%.

I have used a 7% real return as the default rate (this already accounts for ~2-3% inflation), but you can certainly lower it if you want.

Safe withdrawal rate

The safe withdrawal rate is the percentage of your net worth going toward expenses each year.

The most popular rule on the safe withdrawal rate is the four percent rule.

This rule says you can take out 4% of your net worth each year in retirement and never have to worry about running out of money.

This rule was created using historical data on stock and bond returns over the past 50 years.

A study done by William Bengen looked at the stock market crashes of the 1930s and 1970s, and concluded that even during the recession, the four percent rule can last people for at least 30 years.

How much should I save for retirement?

In order to retire early, you have to save more than the regular Kumar.

If most people are saving between 10% to 20% of their income, you have to save more.

My rule of thumb is to save at least 50% of your income.

Last year, my family was fortunate enough to save 70% because we do make a lot compared to the average American.

But compared to other people at our income level, we are much less extravagant. We still rent, we drive a beat-up car with more than 150,000 miles on it, and I don’t remember the last time I bought new clothes.

Sure, I enjoy fine dining, that’s my guilty pleasure, and I buy a lot of tech gadgets and Starbucks. But we stay within our budget, and then some, and never compare ourselves to our friends with fancy cars and giant houses.

Retirement Calculator: Summary

I hope you enjoyed using this retirement calculator. If you have any feedback. questions, feel free to comment below.

And I’d love to hear your results! Please share your net worth goal and other details, and let us know if you are satisfied with your plan!

What’s Next?

Live in NYC? Try our specialized calculator: NYC FIRE Calculator – accounts for triple taxation and NYC-specific expenses

Here, I share the stocks that I personally invest in for fun: Best Stocks to Invest in Long Term: 20% of My Portfolio

What is wrong with America? Two words: Wealth Inequality: How to Make Money Despite Wealth Inequality

How much SHOULD you have by now? Try out another calculator: the Net Worth by Age Calculator

Reducing your tax drag through tax-loss harvesting can accelerate your path to retirement.

Frequently Asked Questions

How much money do I need to retire at 55?

It depends on your spending. At a 4% withdrawal rate, you need 25x your annual expenses. If you spend $100,000/year after tax, you need about $2.5M in investable assets — plus additional for taxes depending on your account types (Roth, traditional, taxable). This calculator factors in federal and state taxes to give you a more accurate number.

What is the 4% rule?

The 4% rule says you can withdraw 4% of your portfolio in year one of retirement, then adjust for inflation each year, and your money should last at least 30 years. It’s based on research by William Bengen analyzing the worst market periods in U.S. history. For earlier retirement (before 50), consider using 3.5% or 3% to be safer.

Should I include my home equity in my retirement number?

No — unless you plan to sell it. Your home doesn’t generate income you can spend. This calculator separates home equity from investable assets and adds property tax as an ongoing expense instead. If you own your home free and clear, that’s still valuable because it eliminates housing costs from your retirement spending.

How do taxes affect my retirement number?

Significantly. If all your money is in a traditional 401(k), every dollar withdrawn is taxed as ordinary income. That means you need to withdraw $130K–$140K to actually spend $100K. Roth accounts are tax-free. A mixed portfolio (the most common) falls in between. This calculator models all four scenarios so you can see the real difference.

Does it matter what state I retire in?

Yes. States like Texas, Florida, and Nevada have no income tax, while California and Oregon can take 9%+ of your retirement income. This calculator includes state-specific income tax and property tax rates for 18 states plus four generic tiers. Moving from a high-tax to a no-tax state could reduce your retirement target by 10–15%.