Nader Agency
Helping people get off the radar-screen of the IRS

Calculators

Many people are under the impression that if they accumulate a large amount of money for retirement, they will be able to retire comfortably. What is sometimes overlooked is that a large amount of money in an account doesn't necessarily translate into significant retirement income, which is what will actually determine your standard of living in retirement. Without considering the effects of withdrawal rates and taxes, you're not getting a clear picture of what the money in your retirement account will actually translate to for your standard of living in retirement.

Retirement Income Calculator

Many people are under the impression that if they accumulate a large amount of money for retirement, they will be able to retire comfortably. What is sometimes overlooked is that a large amount of money in an account doesn't necessarily translate into significant retirement income, which is what will actually determine your standard of living in retirement. Without considering the effects of withdrawal rates and taxes, you're not getting a clear picture of what the money in your retirement account will actually translate to for your standard of living in retirement.

This calculator demonstrates how your starting principal, annual contributions, expected rate of return, and time determine your asset base. Your asset base and your withdrawal rate will determine your taxable income. The tax bracket you are in during this withdrawal will determine your after-tax income.

Explanations of the terms seen in the calculator:

  • Existing Principal - This is how much money you already have going towards your retirement.

  • Annual Contribution - This is how much additional money you will contribute towards your retirement per year.

  • Rate of Return - The rate you are expecting the money going towards your retirement to grow per year.

  • Asset Base - The total accumulated value of the money going towards your retirement.

  • Withdrawal Rate - The percentage that you will withdraw from your asset base to use as income every year. Most traditional retirement plans suggest around 4%, also known as the "Four Percent Rule".

    • To read more about the Four Percent Rule and why, in reality, you would probably need to use a lower percentage, click here.

  • Taxable Income - How much money you withdraw from your asset base per year, without considering the taxes you need to pay on it first. This is determined by the withdrawal rate from your asset base.

  • Tax Bracket - The tax rate you will end up paying on your taxable income.

  • After-Tax Income - The money you withdraw from your asset base per year, after you've payed taxes on it. This is the actual income you would be able to use in retirement.

    • Keep in mind, this is only considering federal income taxation and not medicare supplement premiums, social security benefits, and state or local taxation, which will likely reduce your after-tax income even more.