Consumption Smoothing — Savings Rate (Closed Form)

This calculator solves for the constant savings rate that keeps your real (inflation-adjusted) consumption constant across working life and retirement, while allowing different returns (i in accumulation, j in retirement) and a flat tax on withdrawals. Read the full write-up on Substack: How much should you really save?

Inputs

Assumptions: constant real income and constant real consumption, flat tax on each withdrawal. This does not model sequence-of-returns risk.

Results

Required savings rate s —
Monthly saving (today’s money) —
Monthly consumption during work (today’s money) —
Monthly gross withdrawal in retirement (pre-tax) —
Consumption decomposition over time (real)
Annual values in inflation-adjusted dollars. Working years: Consumption + Savings. Retirement years: Consumption + Taxes. (Savings and taxes shown separately. Consumption colors differ by phase.)
Portfolio value over time (real)
Annual portfolio values in inflation-adjusted dollars (real terms).
Closed-form formula (real terms)


          

            Want the intuition and derivation? Read the article:
            
              How much should you really save?