How to Calculate Time Until Retirement

Calculating how much time you have until you can enjoy retirement is an inexact process at best, but you can increase the accuracy if you already have a good sense of your average annual expenses and income. Depending on how young you are and how early you want to retire, you may also want to add in expected periodic salary increases into your calculation to determine when you will be capable of retiring.


    • 1

      Determine what age you would like to retire at. Subtract that age from the current life expectancy for your gender. Life expectancy is an average, and you may be healthier or less healthy than the general population. You may also have additional genetic risk factors for diseases such as cancer. Nevertheless, this will give you a good idea of the number of years that you'll spend in retirement.

    • 2

      Calculate how much money per year you think you will need to enjoy your retirement. You may wish to create several tiers of retirement. Find out how much money you would need every year in retirement just to survive comfortably in your home. Ratchet up the expenses for what you think you would need to travel occasionally. Continue adding on tiers for additional levels of luxury you may want to enjoy in retirement. Multiply the amount you will need per year by your expected lifespan after retirement.

    • 3

      Figure out if you will still be making mortgage payments once you retire. Housing expenses are a significant portion of most people's annual costs. Even if you will have your mortgage paid off by the time you enter retirement, you will still need to pay for maintenance, homeowner's association dues, property taxes, and other fees.

    • 4

      Estimate the average returns that you will make on your retirement investments, factoring in regular contributions. The simplest method for handling this complex calculation is to use an online retirement calculator like one of the links provided in the resources. The projected returns on your investments will not necessarily be the same as the actual returns, as any investment that has a yield has a corresponding risk attached to it.

    • 5

      Choose your retirement date based on how long you believe you'll need to work in order to give yourself a comfortable retirement. There are no rules about when, how, and even if you should retire. Use your projections to inform your decision, but try not to make ironclad commitments based on your projections. Unexpected events will usually occur that may alter your retirement plans, particularly if you have decades before you're even considering retiring.

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