Are you on track for retirement? A score in 12 questions — with the full math shown.

The projected nest egg at retirement uses a standard future-value-with-annuity formula in real (inflation-adjusted) dollars:

FV = current_savings × (1+r)^Y  +  annual_contribution × [((1+r)^Y − 1) / r]

Where r is the real return implied by your risk profile (Conservative 2%, Moderate 4%, Aggressive 5.5%) and Y is years to retirement. We use real returns — equivalent to assuming 2.5% inflation and quoting everything in today's dollars. This means the "required spending in retirement" and the "projected nest egg" are directly comparable without further inflation adjustment.

Historical real returns (Damodaran, NYU Stern, 1928–present): U.S. large-cap stocks ~6.7% real, U.S. 10-year Treasuries ~1.9% real, a 60/40 portfolio ~4.5% real. Our defaults are intentionally a touch below the historical mean to bias toward conservatism.

The standard replacement-rate assumption is 70–85% of pre-retirement spending. We use 80% as the base. This accounts for the typical retirement spending drop (no mortgage on the original house, no payroll-tax withholding, no commute, lower clothing / dry-cleaning, kids off payroll) offset by higher healthcare and discretionary travel.

We then apply a small longevity adjustment: planning to age 95 nudges required spending up slightly (you need more years of it); planning to age 85 trims it down. The base is 80% of today's spending in today's dollars.

If your retirement spending will be materially different from today (paid-off mortgage you don't have yet, expected long-term-care load, planned international travel), adjust the "Current annual spending" input down or up to reflect that retirement reality.

The composite assumes healthcare costs are embedded in the 80% replacement rate of spending. The Fidelity Retiree Health Care Cost Estimate ($165K per person at 65 in 2024 dollars) is roughly consistent with $7–9K/year per person from 65 to 85, which the 80% spending replacement covers for most middle-to-upper-middle-income households.

For higher precision — particularly for households facing IRMAA cliffs on Medicare Part B/D premiums or a high probability of long-term-care need — the Roth Conversion Stairstep tool models IRMAA, and the standalone healthcare-cost and long-term-care planning belongs in a dedicated planner conversation. The Institute is building a dedicated Healthcare Cost Estimator; until it ships, the IRMAA pieces inside the Roth Conversion Stairstep tool are the closest available proxy.

The composite uses your stated Social Security benefit "at FRA" (full retirement age, currently 67 for anyone born 1960 or later). Delaying claiming from 67 to 70 increases benefits by ~8% per year of delay, for a 24% lifetime increase. Claiming early at 62 reduces benefits by ~30%.

This composite does not optimize claiming age — that's the job of the dedicated Social Security tool sequence. But the "Delay Social Security to 70" gap-closer below estimates the score impact of taking the higher benefit.

William Bengen's 1994 paper found that a 4% initial withdrawal rate, inflation-adjusted annually, had never failed over any historical 30-year U.S. retirement period in a 60/40 portfolio. That's the "4% rule."

Subsequent work (Wade Pfau, the Trinity Study updates, and Bengen's own updated work) argues for lower withdrawal rates when (a) the planning horizon exceeds 30 years, (b) current equity valuations exceed historical norms, or (c) the retiree wants higher than 95% historical success probability. 3.3% is the consensus "safer" number for a 40-year horizon at current valuations.

By showing both required-nest-egg numbers, you can see how sensitive your score is to the withdrawal assumption. If your score crosses the "on-track" line at 4% but not at 3.3%, you are on the edge of the assumption.