Retirement Calculator

The "$2M in 2060" trap: why nominal and real numbers are both shown

Almost every retirement calculator on the internet shows you one number: the balance your account will say on the day you retire. That number is real, but it's also the least useful number for deciding whether you're actually on track — because it's measured in dollars that don't exist yet, inflated by decades of price increases that happened between now and then. A headline of "you'll have $2,000,000 at retirement" sounds like financial freedom. If that $2,000,000 arrives in the year 2060 after 35 years of even modest 2.5% inflation, it buys roughly what $1,000,000 buys today — half the purchasing power the nominal number implies, hiding in plain sight behind a number that looks twice as reassuring as it should.

This calculator refuses to show you only the flattering number. Every projection reports both: thenominal nest egg (what the account statement will actually say, in the dollars of that future year) and the real nest egg (that same balance translated back into today's purchasing power, using your inflation assumption). The formula is simple and shown explicitly rather than hidden in a black box:

nestEggReal = nestEgg / (1 + inflationRate)^(retireAge − age)

Divide the future balance by the compounded inflation factor over your accumulation years and you get what that balance is actually worth in today's terms — the number that should drive your "am I on track" judgment, not the bigger, more flattering nominal figure sitting next to it. Both numbers are true. Only one of them tells you what you can actually buy.

The 4% rule and what it's actually doing here

Once the real nest egg is known, the calculator applies a safe withdrawal rate (SWR) — 4% by default, the classic "4% rule," fully adjustable in the form above — to estimate a sustainable monthly income:

sustainableMonthlyReal = nestEggReal × (swrPct / 100) / 12

That's the monthly income the nest egg alone can plausibly sustain, in today's purchasing power, without the plan hinging on picking exactly the right sequence of good and bad market years. It is a planning heuristic, not a guarantee — see the "What's the 4% rule, and what are its limits?" FAQ below for the honest caveats, including why some planners now argue for something closer to 3-3.5% for extra margin, especially for a retirement that might run 40+ years instead of 30.

A worked example

Run the accumulation defaults exactly as they load — a 30-year-old, retiring at 65, starting from $50,000 in savings, contributing $1,000 a month, at a 7% nominal return and 2.5% inflation — and the nest egg at retirement comes out to roughly $2.39 million nominal. That's the headline number most calculators would stop at, and it's the one that produces the "$2M in 2060" illusion described above. Run the same projection's real-dollar conversion and that $2.39 million becomes roughly $1.01 million in today's purchasing power — the number that should actually drive the "am I on track" judgment. At a 4% safe withdrawal rate, that real balance supports about $3,350 a month on its own; add a Social Security estimate on top and total monthly income clears $5,000 for most people at that income level, comfortably funding a $5,000/month desired-spending target. Change any one input — a lower contribution, a shorter horizon, a higher desired income — and watch how quickly the funded-ratio bar moves; the gap between "funded" and "not funded" is usually narrower than people expect.

Benefits: CPP, OAS, Social Security, and anything else

Sustainable income from savings is only half the retirement-income picture for most people — government and employer benefits usually cover a real chunk of spending before a single dollar of the nest egg gets touched. This calculator treats every benefit — CPP, OAS, Social Security, a pension, an annuity, anything — as the same generic shape: a label and a monthly dollar amount. The country tabs above simply decide which benefit fields are visible and which currency labels the outputs (USD on the US tab, CAD on the Canada tab); underneath, the engine just sums whatever benefit rows are active:

benefitMonthly = sum(benefits[].monthly)
totalMonthlyReal = sustainableMonthlyReal + benefitMonthly
fundedRatio = totalMonthlyReal / desiredMonthlyIncome

A funded ratio of 1.0 or higher means your projected sustainable income plus benefits fully covers your desired spending; below 1.0 means a projected shortfall. The bar chart above renders that ratio directly against your desired income, so the gap (or the surplus) is visible at a glance rather than buried in a table of numbers you have to subtract yourself.

Default benefit amounts are prefilled from verified sources, each labeled for exactly what it is — not massaged to look more generous than the source data supports. Social Security defaults to the SSA's published average monthly benefit for a retired worker; CPP defaults to the CRA's published average amount for new beneficiaries at age 65 (not the higher figure for all existing recipients, which is a different population); OAS defaults to the maximum monthly amount for ages 65-74, which most recipients don't actually receive in full. Replace every one of these with your own real numbers from a Social Security or My Service Canada Account statement — the defaults exist to make the calculator usable on first load, not to model your specific benefit.

Claiming age: what this calculator does and doesn't tell you

Both CPP and Social Security let you delay claiming past the standard age in exchange for a permanently larger monthly check for the rest of your life — CPP's standard age is 65, reducible to as early as 60 or increasable by delaying to 70; Social Security's full retirement age is 66-67 depending on birth year, with reductions as early as 62 and increases for delaying to 70. This calculator deliberately does not tell you when to claim. It's a documented tradeoff, not an advised decision: whatever monthly amount you type into the Social Security/CPP/OAS fields is treated as a fixed input starting at your chosen retirement age, and the calculator has no opinion on whether you should claim early, on time, or late. See the "When should I take CPP or Social Security?" FAQ below for the shape of the tradeoff — including why the "breakeven age" for delaying typically lands in the late 70s to early 80s — and talk to a licensed advisor before deciding, since the right answer depends on health, other income, and life expectancy in a way no calculator should pretend to know.

Couples math: two people, one household spending target

Checking "Include a spouse/partner" doesn't change the accumulation math — the nest egg projection still models one combined pool of savings and one combined monthly contribution, because that's how most couples actually save, whether the money sits in one household brokerage account or is split across two individually-owned accounts. What the couples toggle changes is the benefit side: it reveals a second set of the active tab's benefit fields (a second Social Security amount on the US tab; a second CPP and OAS amount on the Canada tab), because CPP, OAS, and Social Security are paid per person, not per household, so a couple's total benefit income is genuinely the sum of two separate entitlements. The desired monthly income field stays a single, shared number — it's meant to represent total household spending, however the couple actually splits or pools it — so the funded ratio compares one household's combined income (nest-egg withdrawal plus both people's benefits) against one household spending target, which is the comparison that actually matters for deciding whether the household plan works.

Every default, and why it's set where it is

• Age 30, retiring at 65 — a 35-year horizon. Long enough to make compounding and the nominal-vs-real gap both visible without needing an implausible number of years typed in.
• $50,000 savings, $1,000/month contribution, 7% return, 2.5% inflation. The same planning assumptions used across this site's other calculators (see DEFAULTS in the shared constants file), applied consistently so numbers stay comparable across pages.
• $5,000/month desired income, today's dollars. A round, moderate household spending target — deliberately close enough to the calculator's own default outputs that toggling the country tab or the couples checkbox visibly moves the funded-ratio bar across the funded/ underfunded line, rather than landing far on one side no matter what you change.
• 4% safe withdrawal rate. The classic default, fully adjustable — see the 4% rule FAQ below for its limits and why some planners argue for something more conservative.
• Benefit fields prefilled from BENEFIT_DEFAULTS. Social Security, CPP, and OAS each default to the specific verified figure named right next to the field (average vs. maximum, which population, which date) — see the "Benefits" section above for exactly what each one means and why they aren't interchangeable.

What this calculator doesn't model

This is a planning estimate, not financial advice, and not a substitute for a financial planner who knows your full situation. Specifically excluded: taxes on withdrawal (401(k)/RRSP withdrawals are taxed as ordinary income; this calculator shows pre-tax sustainable income only); contribution-room limits for any account type; employer matching; CPP/OAS/Social Security claiming-age math (benefit amounts are treated as fixed inputs, not computed from a claiming age — see the claiming-age section above); market sequence-of-returns risk (the accumulation phase uses a single flat annual return, not a simulated range of possible market paths); healthcare costs, which often rise faster than general inflation and aren't modeled separately; and any province/state-specific retirement program beyond CPP, OAS, and Social Security. Treat every output here as a starting point for a conversation with a licensed financial planner, not a filing-ready or investment-ready number.