Retirement Calculator

Why plan retirement as early as possible?

Time is the most valuable asset in retirement planning. Thanks to compound interest, starting to save at 30 instead of 40 can mean double or more capital at retirement, even with the same monthly contributions.

Key simulation factors

• Expected return: depends on the type of investment. Conservative pension plans may return 2-4%; diversified variable-income plans, 5-8% historically.
• Inflation: reduces the purchasing power of accumulated capital. It is important to know how much that money will be worth in real terms when you reach retirement.
• Equivalent monthly income: calculated by dividing total capital by 240 months (20-year post-retirement average), assuming capital is gradually consumed.

The "how much do I need to retire?" rule

A common estimate is to multiply the annual expenses you expect in retirement by 25 (the 4% rule). For example, if you estimate spending €20,000 per year, you would need €500,000 in capital. This assumes you can withdraw 4% annually without depleting the fund.

How the monthly retirement income is estimated

There are two common ways to turn your accumulated capital into income. The 4% rule assumes you can withdraw 4% of the initial capital each year (adjusted for inflation) with a low chance of running out in 30 years. The other, simpler one, spreads the capital across the months you expect to be retired:

Example: €300 a month from age 35 to 67

If you contribute €300 a month from age 35 to 67 (32 years) with an average return of 5%, you would accumulate around €277,000. Of that, only €115,200 would be your contributions; the rest, nearly €162,000, is interest generated by compounding. Spread over 20 years of retirement, that is an income of about €1,150 a month to complement your public pension. Starting ten years later, at 45, would roughly halve that capital.

Common mistakes when planning for retirement

• Starting too late. Compound interest needs time. Each decade you delay can cost you half of your final capital.
• Relying only on the public pension. The replacement rate (pension relative to your last salary) tends to fall. Complementary saving reduces that risk.
• Ignoring inflation. €277,000 in 30 years does not buy what it does today. Always think in terms of real purchasing power.
• Forgetting taxation. Pension plans, funds and other products are taxed differently on withdrawal. Take this into account before choosing a vehicle.

Frequently asked questions about retirement

How much do I need to save to retire?

A quick estimate is to multiply the annual expenses you expect in retirement by 25 (the 4% rule). If you expect to spend €20,000 a year, you would need about €500,000. The exact figure depends on your estimated public pension, life expectancy and spending level.

What is the 4% rule?

It is a classic guideline suggesting you can withdraw 4% of your portfolio in the first year of retirement, then adjust that amount for inflation, with a high probability the money lasts about 30 years. It is an indicative reference, not a guarantee.

Pension plan or index fund?

Pension plans often offer tax advantages on contributions but are taxed on withdrawal and have limited liquidity. Index funds offer more flexibility and low fees. Many savers combine both. The best option depends on your tax situation and liquidity needs.

At what age should I start?

The sooner the better. Thanks to compound interest, someone starting at 25 can reach retirement with double the capital or more than someone starting at 35 contributing the same. If you are already late, contributing more and staying consistent helps you catch up.

Does this calculator include the public pension?

No. It simulates only the private capital you build with your contributions. Your total retirement income will be that estimated private income plus the public pension you are entitled to.