# Retirement Readiness Score

> Calculate your retirement readiness score. See your projected savings, target nest egg, monthly gap, and savings growth chart.

**Category:** Finance
**Keywords:** retirement, readiness score, nest egg, retirement savings, 4% rule, retirement calculator, savings rate, financial planning
**URL:** https://complete.tools/retirement-readiness-score

## How the Score is Calculated

The calculator uses two compound growth formulas:

**Future value of current savings:**
```
FV = CurrentSavings × (1 + r)^years
```

**Future value of ongoing contributions:**
```
FV = AnnualContributions × ((1 + r)^years − 1) / r
```

Where `r` is the expected annual return (default 7%) and `years` is the time until your target retirement age.

**Total projected savings** = sum of both values above.

**Target nest egg** = Annual Income × 25 (based on the 4% safe withdrawal rule).

**Score** = min(100, round(Total Projected / Target Nest Egg × 100))

## The 4% Rule Explained

The 4% rule (also known as the safe withdrawal rate) states that you can withdraw 4% of your portfolio per year in retirement without running out of money over a 30-year period. Multiplying your annual expenses by 25 gives you the portfolio size needed to support those withdrawals indefinitely.

For example, if you spend $60,000 per year, you need a $1,500,000 nest egg ($60,000 × 25).

The 4% rule was derived from the Trinity Study (1998) using historical U.S. stock and bond return data. Some financial planners now recommend a 3–3.5% withdrawal rate for longer retirements (30–40 years).

## Understanding the Monthly Gap

The Monthly Gap shows how much additional monthly savings you would need to close the shortfall and reach a score of 100 by your target retirement date.

If your gap is $0, congratulations — you are on track. If it's significant, you have several levers to adjust:

- **Increase contributions** — even small increases compound significantly over time
- **Delay retirement** — extra years of contributions and growth
- **Reduce expenses** — a lower target nest egg means a smaller gap
- **Seek higher returns** — through diversified equity investments (though this increases risk)

## How to Use This Tool

1. Enter your current age and target retirement age
2. Enter your gross annual income
3. Enter your total current retirement savings (401k, IRA, brokerage)
4. Enter your total monthly retirement contributions
5. Adjust the expected annual return (default 7% is a conservative long-term equity average)
6. View your score, projected savings, and monthly gap
7. Share your score with the "Share My Score" button

## FAQs

**Q:** What return rate should I use?


**A:** 7% is a commonly cited long-term average for a diversified stock portfolio after inflation. Use 5–6% for a more conservative mixed portfolio. The actual rate depends on your asset allocation.


**Q:** Should I include Social Security?


**A:** This calculator does not include Social Security by default. To account for it, reduce your annual income input by your expected annual Social Security benefit, since you will need less from savings to cover the difference.


**Q:** What if I have multiple retirement accounts?


**A:** Add up all retirement savings (401k, IRA, Roth IRA, brokerage) into the "Current Retirement Savings" field.


**Q:** Is a score of 80 good enough?


**A:** A score of 80 means your projected savings will cover 80% of your target. Whether that is sufficient depends on whether you plan to supplement with Social Security, part-time work, or reduced spending in retirement.


**Q:** Why does the projected retirement age say 100+?


**A:** If your current savings rate is very low relative to your target, the calculator cannot find a crossing point within 100 years. This signals that a significant increase in contributions or a reduction in income target is needed.

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*Generated from [complete.tools/retirement-readiness-score](https://complete.tools/retirement-readiness-score)*