The calculator
Withdrawing 4.0% of $1,000,000 gives $3,333 a month. With your other income, that is $5,733 a month before tax, $267 short of the spending you entered.
Pension calculator: estimate your monthly pension
Most defined-benefit pensions use one formula: your final average salary, times your years of service, times the plan’s multiplier. Enter your plan’s numbers to estimate the pension, then add it to the income calculator above.
$80,000 × 30 years × 2.0% is $48,000 a year, about $4,000 a month before tax.
This is the general formula. Early-retirement reductions, survivor options, caps and cost-of-living increases differ by plan, so once you have your plan’s benefit statement, use its figure. To compare the monthly pension with a lump sum, use the pension vs lump sum calculator.
How a pension is calculated
Final average salary is usually the average of your highest three or five years of pay. The multiplier is the share of that salary you earn for each year of service. On a $80,000 final average salary, 30 years at 2% is $4,000 a month.
| Years of service | 1.0% | 1.5% | 2.0% | 2.5% |
|---|---|---|---|---|
| 10 years | $667 | $1,000 | $1,333 | $1,667 |
| 20 years | $1,333 | $2,000 | $2,667 | $3,333 |
| 25 years | $1,667 | $2,500 | $3,333 | $4,167 |
| 30 years | $2,000 | $3,000 | $4,000 | $5,000 |
| 35 years | $2,333 | $3,500 | $4,667 | $5,833 |
- Federal employees (FERS). 1% of your high-3 average salary for each year of service, or 1.1% if you retire at 62 or later with at least 20 years. 20 years on a $90,000 high-3 at 1.1% is $19,800 a year, $1,650 a month. The FERS retirement calculator adds the MRA, the supplement and the survivor cost.
- Military retirement. 2.5% of your high-3 basic pay for each year of service under the legacy High-3 system, and 2% under the Blended Retirement System. At 20 years that is 50% or 40% of high-3 pay. The military retirement calculator adds the Survivor Benefit Plan.
- State, teacher and company plans set their own multiplier and salary period, and some reduce the pension for retiring early. Your plan handbook or annual statement lists them.
At the federal level a pension is taxed as ordinary income, except any part that returns contributions you already paid tax on. Many states exclude some or all of it; the retirement taxes by state pages show each state’s rule.
Figures checked on against OPM, FERS basic annuity computation and DoD, Blended Retirement System frequently asked questions (PDF).
How much income will my savings generate?
Monthly income from savings alone, before tax, at four common withdrawal rates. $1 million at 4% is $40,000 a year, about $3,333 a month. Add Social Security and any pension on top.
| Savings | 3.5% | 4.0% | 4.5% | 5.0% |
|---|---|---|---|---|
| $250,000 | $729 | $833 | $938 | $1,042 |
| $500,000 | $1,458 | $1,667 | $1,875 | $2,083 |
| $750,000 | $2,188 | $2,500 | $2,813 | $3,125 |
| $1,000,000 | $2,917 | $3,333 | $3,750 | $4,167 |
| $1,500,000 | $4,375 | $5,000 | $5,625 | $6,250 |
| $2,000,000 | $5,833 | $6,667 | $7,500 | $8,333 |
What counts as retirement income
- Social Security. For most retirees the largest income that lasts for life and rises with inflation. When you claim changes the amount; the Social Security breakeven calculator compares claiming at 62, full retirement age and 70.
- Pensions and annuities. Fixed monthly payments, sometimes with a cost-of-living increase.
- Withdrawals from savings. IRAs, 401(k)s, brokerage accounts and cash. The withdrawal rate sets how much; once you reach your RMD age the IRS sets a minimum, which the RMD calculator works out. The withdrawal order calculator shows which account to draw from first.
- Other income. Part-time work, rent, royalties. Enter it monthly.
How much monthly income do I need in retirement?
Start from what you expect to spend, not from what you earn now. Housing, healthcare and travel usually decide the number; commuting, saving and payroll tax drop away. A common rule of thumb is 70% to 80% of pre-retirement income, which is a rough check at best. If income falls short, the gap tells you how much more savings, later retirement or lower spending it would take to close. For how long a given balance lasts, use how long will my money last.
Income gap analysis: expenses vs guaranteed income
An income gap analysis sets your monthly expenses in retirement against the income that is guaranteed for life, Social Security and any pension or annuity. Whatever is left is the gap your savings have to fill every month. With the defaults above, $6,000 of monthly expenses less $2,400 of Social Security leaves a gap of $3,600 a month, or $43,200 a year. At a 4% withdrawal rate, closing it takes $1,080,000 of savings.
- List monthly expenses, and split them into essentials (housing, food, health insurance, utilities, taxes) and the rest.
- Add up guaranteed income: Social Security at the age you plan to claim, pensions and annuities.
- Compare the two. If guaranteed income covers the essentials, savings only fund the extras, and a flexible withdrawal rule can cut those in a bad year. If it does not, the essential gap is the part of the plan that cannot be cut.
Enter your own expenses in the spending field and the calculator shows the gap, the share of income that is guaranteed, and how much more savings would close it.
Is this income before or after tax?
Before tax. Traditional IRA and 401(k) withdrawals, pensions and up to 85% of Social Security are taxable; Roth withdrawals are not. The retirement tax calculator takes the same income and shows the 2026 federal and state tax on it.
Is the income from my savings safe?
A monthly figure from a rate is not a forecast. Sequence risk, fees and a long horizon all cut what lasts, which is why the band above runs 1,000 market paths. The safe withdrawal rate calculator tests the rate, and the withdrawal strategy hub compares rules that cut spending after bad years, such as Guyton-Klinger and Vanguard dynamic spending.
How accurate are retirement income calculators?
As accurate as their inputs, and no more. The arithmetic here is exact, but every input is a guess about the future: your spending, the return, inflation, when you claim Social Security and how long you live. Small changes compound: a withdrawal rate of 3.5% instead of 4% cuts income from savings by an eighth. Use the result as a check you repeat, not a verdict. Re-run it once a year, and again after any big change such as a job move, a market fall, a new benefit estimate or a change in health.
Assumptions
Withdrawals are the rate times today’s balance, divided by 12. Social Security, pensions and other income are entered as monthly amounts in today’s dollars. Everything is before tax. The band is 30 years at a 5% mean return, 15% volatility and 2% inflation, seed 20260815.