As one of our Adviser Intel contributors, Anthony Martin, says: "With savings, it's not the amount that matters the most, but the consistency." In his article on how to save for big goals, he goes on to explain that, "If you save $5 every month from the age of 10, you will have saved $1,200 by the time you're 30." Getting into the regular savings habit, even if it's a small amount each month, can add up significantly over time.

If you want to know how much you need to save each month to reach your financial goal, use our simple calculator that helps you create a realistic monthly savings plan to reach your target goal.

Work through each section, factoring in your current savings, your target timeline and the interest rate you expect to achieve.

Return and repeat this exercise as much as you need to track your savings goals.

Related content

• I'm a Financial Adviser: This Is How You Can Save for Big Goals
• Savings Calculator: If You Saved $5,000 Five Years Ago, Here's What You'd Have Now
• Seven Ways to Make Saving for a Large Purchase Easier and Faster
• Seven of the Best Budgeting Apps

Using our savings calculator can help you quickly determine how much your money will grow over time. If you invested either $1,000, $5,000 or even $10,000 in a high-earning account several years ago, you could be several thousand dollars richer today.

Whether you’ve just opened one of the best CD accounts or opted for a high-yield savings account with an impressive APY, a savings calculator can easily show you just how much cash you’ll have after a specified period of time, depending on your account APY and any regular monthly contributions you make.

Savings rates have dipped following the Federal Reserve's cutting rates at each of its last three meetings. However, many APYs remain high enough to outpace inflation, making them wise options to consider.

Savings calculator

You can use our savings calculator below to determine how much you'll save depending on several factors — APY, time period, initial deposit and monthly contributions.

To use the calculator, start by inputting the amount of cash you're starting with, or the initial deposit. From there, add in the amount you plan on contributing to the account as a monthly deposit.

After this, you'll then be able to choose from a number of savings accounts with varying APYs. Select a period of time over which your investment will grow, and our calculator will do the work for you, calculating your potential savings.

1. If you saved $1,000 over five years, you'd have...

Keep in mind that savings rates might continue to drop later this year, so you'll want to lock in a great rate sooner rather than later. Here is how much you can earn if you invested $1,000 for five years:

2. If you boost your $1,000 savings pot by $50 each month, you'd have...

If you make regular monthly contributions, you can see the interest stack up, it's the beauty of compounding. Contributing just an extra $50 a month can make a big difference after several years.

If you were to invest $1,000 in one of the top-earning high-yield savings accounts and then save an additional $50 every month for five years (an additional $3,000 in total), here's how much you'd have at the end (not considering rate fluctuations.

3. If you saved $5,000 over five years, you'd have...

Of course, if you increased the amount you saved from $1,000 to $5,000, you'd earn significantly more in interest after five years:

4. If you saved $11,000 over five years...

If you were to save an additional $100 each month ($6,000 in additional contributions) over five years, here's how much you'd have at the end (not taking into account any fluctuations in rates and inflation:

How much should you save each month?

How much you should save each month depends on your specific financial situation, but a general rule of thumb is to set aside three to six months’ salary or living expenses in an emergency fund.

Another general rule that can help you prioritize savings is the 60-30-10 budget rule, in which you devote 60% of your monthly income toward necessities, 30% toward wants, and 10% towards savings or paying down debts.

If you need help with budgeting, budgeting apps are excellent tools to use. They compile all your financial accounts in one place to help you see where your money is going, and to ensure you're on course to reach your savings goals.

How to choose a savings account 

Choosing a savings account depends on your personal financial goals. Here's what to consider.

Certificate of Deposit (CD): A certificate of deposit, or CD, is a type of savings account that holds a fixed amount of money for a fixed period of time. Typical term lengths for CDs range anywhere from three months to five years, so it’s not somewhere you’d store cash you need easy access to. Instead, it’s a good place to save cash you’re holding onto for a particular savings goal. For example, you may plan on purchasing a vehicle or making a down payment on a home in two years and are looking for a no-risk way to grow these savings.

Use this Bankrate tool to find a CD term that works for your finances:

Savings account: On the other hand, savings accounts are better suited for cash you’ll want easy access to, like emergency fund savings. If you want to maximize these savings, consider opening a high-yield account. High-yieldsavings accounts are the same as traditional savings accounts, but they pay a higher-than-average APY on deposits.

Money market account: Money market accounts give you quicker access to your cash while still allowing you to earn a healthy return on your investment. Some of these accounts come with check-writing privileges, giving you the opportunity to have access to cash when you need it.

Balance and deposit requirements: Some accounts have minimum balance and/or deposit requirements. If you fail to meet these, you could incur a fee.

Safety: Ensure your savings account is FDIC or NCUA-insured to keep your savings safe.

Compare some of the best savings accounts below.

Related Content

• Where to Store Your Cash in 2026
• Best No-Fee High-Yield Savings Account
• Best CD Rates
• Do You Have a CD Maturing Soon? Here's What to Do Next

Whether you are buying your first home or your forever home, understanding your monthly mortgage payment is essential before you close. It is often the largest recurring expense in your budget, and knowing what you will owe can help you make smarter financial decisions when purchasing a home.

With borrowing costs still elevated, it is especially important to understand the full cost before you commit. Even small changes in interest rates, loan terms or down payment can significantly impact what you pay each month.

With that in mind, we will walk you through how to figure out your mortgage payment whether you are running the numbers by hand or using the calculator below to see how different loan amounts, rates and terms affect your bottom line.

How to use the mortgage calculator 

Understandably, you may be struggling with determining just how much you’ll owe on your mortgage, as the mortgage payment calculation looks like this:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1].

However, with our mortgage calculator, you can forego all the complicated calculations and simply enter a few pieces of information.

First, you'll enter the overall price of your home, if you’re buying, or the current value of your home if you’re refinancing.

You’ll also include either the down payment (the cash you plan on paying upfront towards the home) or the amount of equity you have (the value of the home, minus what you owe on it).

After this, you’ll enter the term length of your loan. If refinancing, enter how many years are remaining on your current loan.

Typically, most mortgages are 30-year mortgages, but you can choose between several term lengths to decide which loan term is right for you. You can then compare how different interest rates will affect your monthly payment. Entering your annual household income and credit score will show you how much you'll be able to reasonably afford.

Using the mortgage calculator below can also help you determine how much to put down on your home. While it's recommended to put down 20% to get the best rates, it's not necessary, and you can play with this number to see how it affects your mortgage rate.

Saving on your mortgage rate

Lenders consider many factors when determining the interest rate on your mortgage, including down payment, loan term and the price of the property.

The biggest factor they take into consideration, however, is your credit score. Boosting your credit score could potentially save you thousands of dollars on your home mortgage.

The chart below, from MyFICO, shows how much you can expect to pay depending on where your credit score stands, based on a 30-year fixed mortgage of $400,000.

Here are a few other tips, besides raising your credit score, that can help you score a low mortgage rate.

• Increase your down payment: The higher your down payment, the less principal and less interest you'll have to pay over the life of the loan. You'll likely need a 20% down payment to get the best rates.
• Shop around: Because different lenders offer different rates, it's important to get at least three quotes when shopping for a mortgage in order to take advantage of the lowest rates.
• Consider an adjustable-rate mortgage (ARM): An ARM could be a good option for you, especially if you plan on selling your home sometime in the future. These mortgages offer fixed interest rates that are often lower than those for traditional mortgages for a set number of years. With the tool above, you can see how much your monthly payments will be during the fixed period of an ARM, as well as when the introductory period expires. Once the fixed period is over, your mortgage rate can go up or down based on the market.

Why running the numbers matters

With interest rates holding relatively steady and the Federal Reserve taking a cautious approach, many buyers heading into the summer home shopping season are taking a closer look at affordability. Before you make an offer, it is important to understand what your monthly mortgage payment could look like.

Using a mortgage calculator can help you compare different scenarios, from home prices to loan terms, so you can budget with confidence and make a more informed decision as you navigate the market.

Use the tool below, powered by Bankrate, to explore and compare some of today's top mortgage offers:

Related Content

• 5 Ways to Shop for a Low Mortgage Rate
• My Mortgage Rate is 6.5%. Should I Refinance If Rates Fall By Half a Point
• What Home Equity Is and Why It's a Valuable Long-Term Investment

Almost 28 million Americans moved in 2021. That's over 8% of the country's entire population. Many of those moves were from one state to another, which can have a significant impact on your overall state tax burden. That's because there are wide variations in taxes by state. In fact, for a typical middle-class family, relocating to another state can knock your state tax bill up or down by thousands of dollars. You could, for instance, go from a state with no income taxes to one with very high taxes. Other state and local taxes ‒ like sales taxes and property taxes ‒ can vary dramatically from one state to another, too. That's why it's so important to understand the tax consequences of an interstate move before you pack up the moving van.

The map below will help you compare taxes by state for middle-class families. (The state tax burden may be different for people in other income levels, retirees, or others with unique financial circumstances.) Hover over and click on any state in the map to open detailed information about its income, sales, property, gasoline, cigarette, and other taxes that affect middle-income Americans. Or, in the alternative, you can also click on the state-specific links near the bottom of this page to get the full tax picture for a particular state.

Also check out the tax-specific articles listed below the map, including our picks for the 10 most tax-friendly states and the 10 least tax-friendly states in the U.S. for middle-class families. (Retirees, visit our Retiree Tax Map to learn how each state taxes different kinds of retirement income and to discover special tax breaks for seniors.) If you're contemplating a move across state lines, hopefully this information on taxes by state will help you make a proper decision and/or avoid any state tax surprises in your new home.

More for middle-class families

• The 10 Most Tax-Friendly States for Middle-Class Families
• The 10 Least Tax-Friendly States for Middle-Class Families
• What It Really Costs to Be Middle-Class

See the Full Tax Picture by State

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Washington
• Washington, D.C.
• West Virginia
• Wisconsin
• Wyoming

SOURCES: State government websites, American Petroleum Institute, U.S. Census Bureau, Tax Foundation, Federation of Tax Administrators, Campaign for Tobacco-Free Kids, and Distilled Spirits Council of the United States.

Related Content

• 9 States with No Income Tax
• Taxes on Unemployment Benefits: A State-by-State Guide
• 10 States With the Highest Sales Taxes
• 10 States With the Lowest Gas Taxes

About Our Methodology

There are several factors to consider when deciding where to relocate once you retire, and state tax on retirees is probably one of them. After all, taxes don’t stop once you leave the workforce, and high-tax states can drain retirement savings faster than states with lower taxes.

Additionally, overall tax burdens can vary significantly from one state to another. That’s why Kiplinger created this state-by-state guide to taxes in retirement.

The interactive map below highlights the most and least tax-friendly states for retirees. You can also use the map to navigate to our state tax guides which include detailed information about income, sales, property, gasoline, estate, and other taxes that impact retirees in each of the 50 states and the District of Columbia.

This information may help you compare taxes for retirees by state.

Tax map

Kiplinger's tax map for retirees

State-by-State Guide to Taxes on Retirees

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Our ranking for the most tax-friendly states for retirees is based on two major factors.

Only states that don't tax retirement benefits were considered.

Of those 13 states, the 10 with the lowest median property taxes paid were chosen.

For our ranking for the worst states to retire in (which place the highest tax burden on retirees), we considered states that still tax Social Security retirement benefits for single filers with an adjusted gross income (AGI) below $75,000.

Then, we factored in states with the highest median property tax bills.

Retirement Taxes

Retiree taxes: What else you need to know

How the IRS Taxes Retirement Income: Provides a breakdown of common sources of income and information on the federal tax treatment of each. This information can help you develop a tax-efficient strategy for your retirement years.

Taxes in Retirement: How All 50 States Tax Retirees: Provides an overview of how income from employment, investments, a pension, retirement distributions and Social Security are taxed in every state.

10 Most Tax-Friendly States for Retirees: Knowing which are the most tax-friendly states for retirees may help you make your decision. Just keep in mind that no state has zero taxes. So, where some types of taxes are low, other types may be high. Considering the pros and cons of state taxes will provide you with the best overall tax picture.

States That Don't Tax Retirement Income. Moving to one of the states that don’t tax retirement income might be one way to pay less taxes in retirement. Some states tax only some types of earnings while others don't tax income at all. If your retirement income includes Social Security benefits, distributions from a 401(k) or IRA, or a pension, you won't see a tax bill from the states on this list.

Worst States to Retire in Due to Taxes: If a primary concern as you consider your retirement destination is saving money on taxes, the places on this list are the worst states to retire in. That's because high property taxes and taxes on traditional types of retirement income, like Social Security, pensions and distributions from a 401(k) or IRA, make these states more expensive than most for many retirees.

15 States That Don't Tax Pension Income: Most states tax at least a portion of the income from many retirement benefit plans. Your state might have a pension exclusion, but chances are it's limited based on your age and/or income. However, some states don't tax pension income no matter your age or how much money you have.

Most Expensive States for Retired Military Service Members: You can’t avoid paying federal tax on your military retirement pay since the IRS taxes that income as a pension. But you might be able to escape a state tax bill — as long as you don’t retire in one of the places on this list.

State tax guides

See the full tax picture by state

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Washington
• Washington, D.C.
• West Virginia
• Wisconsin
• Wyoming

See our Tax Map for Retirees Methodology

Related content

• States That Won't Tax Your Death
• State Tax Changes: What’s New for 2024
• Calculating Taxes on Social Security Benefits

Don’t get obsessed with accounting for every penny. Ballpark values will do, especially when it comes to tangible, illiquid items like collections.

See below for definitions of terms in this calculator and read our guidance on how to establish more accurate values for your various assets.

How to calculate your assets:

Cash: what you have on hand, what’s in your checking accounts and what’s in your savings accounts. Include any savings bonds and certificates of deposit.

Retirement savings: the value of your 401(k), IRA, or other defined-contribution plans. Pensions can be tricky to value.

Other investments/brokerage accounts: Draw from your most recent statements for stocks, bonds, mutual funds and other negotiable instruments.

Businesses you own: While these could be potentially significant assets, they may be illiquid or have significant debt. You will know best how to value them for your personal circumstances.

Life insurance or annuities: Your premium payments on a whole-life insurance policy add to your net worth by increasing your policy’s cash value (the amount you’d get if you cashed it in). Also include the surrender value of any annuities you own.

Primary Residence: If you are a homeowner, this is likely to be your biggest asset. Online calculators can help you get an estimate, but also check to find out how much similar homes in your area are selling for. The same goes for a rental or vacation property you might own.

Property: While cars are relatively easy to value with online guides, other tangible items can be more difficult. Consult specialty guides (or look at online auction sale prices of comparables) and be conservative.

Related Content

• Average Net Worth by Age: How Do You Measure Up?
• Being Rich vs Being Wealthy: What’s the Difference?
• Best No-Fee High-Yield Savings Rates

Waiting until your Social Security full retirement age (FRA) to start taking benefits can have a big financial payoff. Any delay in taking your Social Security benefits will increase your monthly check for the rest of your life. Your check will get a bump up for every month you don't collect benefits up to the age of 70.

If you wait until your full retirement age, you can collect 100% of your Social Security retirement benefit. Initially, when the Social Security Act was signed into law in 1935, the age was 65. However, a law passed in 1983 gradually increased the retirement age to 67.

You can take your benefits early — which will reduce your checks — or delay until past your full retirement age, netting you a bigger benefit. Despite the financial incentive of waiting, we explore some sound reasons to take Social Security early.

Calculate your Social Security full retirement age

Claiming early reduces benefits

Deciding when to apply for Social Security has an impact on the retirement benefits you'll receive. You can claim it as early as 62, but you'll receive a smaller amount if you do. How much your benefits will be reduced depends on what age you are when you claim Social Security.

For example, let’s say you are eligible for 100% of your benefits at age 67, which is the full retirement age for anyone born in or after 1960:

• If you claim Social Security early at age 62, your benefit will be reduced by 30%
• If you claim early at age 63, your benefit will be reduced by 25%
• If you claim early at age 64, your benefit will be reduced by 20%
• If you claim early at age 65, your benefit will be reduced by 13.3%
• If you claim early at age 66, your benefit will be reduced by 6.7%

Under this example, if you were eligible for $1,000 a month at your full retirement age of 67, then the benefit would be reduced to $700 a month if you claimed at 62; $750 if you claimed at 63; and so on, according to the Social Security Administration.

The reduction is calculated each month, not every year, so every month you wait after age 62 will mean a slightly bigger Social Security check in your pocket.

Waiting to claim increases benefits

You can also wait until as late as age 70 to start collecting Social Security benefits. Doing so boosts your retirement benefits. After age 70, there's no benefit to waiting to claim Social Security.

Here’s how your benefit will increase if you wait to claim Social Security:

• If you delay claiming until age 68, your benefit will increase by 8%
• If you delay claiming until age 69, your benefit will increase by 16%
• If you delay claiming Social Security until age 70, your benefit will increase by 24%

Using this example, if you were eligible for a Social Security retirement benefit of $1,000 per month at your full retirement age of 67, the benefit would increase to $1,080 if you delay claiming until age 68; $1,160 if you delay to age 69; and $1,240 if you delay to age 70.

The age at which you start Social Security benefits may affect your spouse's benefits. You may have more flexibility if you are married, since one spouse can start taking benefits while the other waits. So, if you are married, be sure to factor in your spouse's FRA and when they plan to start benefits.

Once again, the delayed retirement credits accrue monthly, not annually, so every month you wait beyond age 67 will net you a slightly bigger monthly check from Social Security. To see how this effect works in the real world, read more on the average Social Security check by age.

Read: Five Reasons You Should Take Social Security At 62 (and Five Reasons You Should Wait)

How to determine when to start taking benefits

When you begin taking Social Security is a personal decision that is influenced by several factors including your health and financial needs. It may also depend on if you have other retirement income, like a 401(k) or an IRA, and how much you have saved in the bank. Other things to consider may include:

• If you want to keep working during your retirement years
• If you need the money now to pay for living expenses
• If you’re in good health or you’re in poor health or disabled
• If you’re eligible for Social Security spousal or survivor benefits

What is the average retirement age?

The average retirement age in the U.S. is 62, according to multiple studies, including the Employee Benefit Research Institute (EBRI) which showed the median retirement age for Americans is 62.

The EBRI/Greenwald 2025 Retirement Confidence Survey, showed that 40% of retirees retired earlier than planned (down from prior years), with a median retirement age of 62. About half retired about when planned.

Similarly, the Transamerica Center for Retirement Studies 2025 Report (pdf) revealed that more than half (52%) of retirees retired sooner than planned, often due to employment issues (47%) or health (40%).

When you retire depends on many factors and no two people are the same. Planning is key to ensuring you can thrive in retirement.

Why knowing your FRA is so important

When you're planning for retirement, it's vital to understand how Social Security works. In particular, what your full retirement age (FRA) is — the age at which you qualify for 100% of your retirement benefits, determined by your birth year. Understanding your FRA will help you make an informed choice about the right age to begin taking Social Security and maximize your chances for a financially secure retirement.

Read More

• Six Changes to Social Security in 2026
• The '8-Year Rule of Social Security' — A Retirement Rule
• The Average Monthly Social Security Check
• The Average Social Security Check by Age
• The Average Social Security Check in Every State

An umbrella insurance policy provides additional coverage outside the existing limits of other policies, such as car insurance and home insurance.

If you get sued after a car accident or that "friend of a friend" slips and falls at your pool party, the liability coverage included in your home or car insurance will cover the legal fees and any money the court orders you to pay to the injured party, up to a limit. That limit is typically around $250,000 to $300,000.

In a lawsuit in which the fees and damages you must pay exceed that limit, you'd be on the hook for everything above that coverage limit. Umbrella insurance kicks in when the underlying liability limit of an insurance policy is reached.

Whether you need this supplemental coverage depends mainly on your net worth and your risk of being sued (you might be more at risk than you think).

Here's what you need to know about umbrella insurance and how to determine how much you need.

How much does umbrella insurance cost?

Umbrella insurance is usually sold in increments of $1 million, up to $5 million. To buy it, you'll need to already have a minimum level of home and auto liability coverage, typically, $250,000 for auto insurance and $300,000 for homeowners insurance.

The cost of umbrella insurance can range anywhere from $200 per year on the low end to more than $1,000, according to Trusted Choice, with an average cost of about $380 per year to get $1 million to $2 million of protection. However, the amount you'll pay for umbrella insurance depends on several factors, such as where you live, how much coverage you buy and your risk profile.

To determine how much your umbrella policy will cost, Trusted Choice advises individuals to assess their net worth, review their risk of becoming the target of a lawsuit and choose an appropriate amount of coverage, which should be at least equal to your net worth.

You can also use this calculator to assess how much coverage you need.

What does umbrella insurance cover?

Most umbrella insurance policies offer coverage for the following:

• Bodily injury: Umbrella insurance can help cover the cost of medical bills and/or liability claims for injuries to another person, whether it's from an at-fault auto accident or an accident in your home (guest falling, dog bite, etc.).
• Property damage: Umbrella insurance can help cover loss or damage you cause to another's property if the damage exceeds your underlying policy limits.
• Lawsuits: If you are involved in a lawsuit for slander, libel, defamation of character and/or other personal attacks, umbrella insurance can provide coverage for legal expenses.
• Landlord liability: If you own a rental unit, umbrella insurance can help cover liability claims you might experience as a landlord, such as if a tenant trips on the property, gets injured and sues. If your landlord policy reaches its limit, umbrella insurance can provide additional coverage.

How to buy umbrella insurance

If you buy your home and auto insurance from the same insurer, you'll typically get a discount of 10% to 15% on your annual premiums, and you might get an additional discount on the umbrella policy, as well. You can offset at least some of the umbrella premium by taking larger deductibles on your auto and home insurance policies.

With a single insurer, your coverage is less likely to fall through the cracks if the requirements for the umbrella policy change. If you're sued, you'll have one set of defense lawyers for the entire case. Otherwise, agents advise you to buy the umbrella policy from your auto insurer, because most large lawsuits involve auto accidents.

If your current home or auto insurer won’t sell you an umbrella policy — because your dog's breed is classified as potentially dangerous, for example — ask an independent agent who represents multiple insurers to help you find a stand-alone umbrella policy.

Do I need umbrella insurance? 

One quick way to tell if you need umbrella insurance is to calculate your net worth. If the total value of your savings, investments, home equity and other assets is higher than the maximum amount of liability coverage your home or car insurance will offer, you want to look into supplementing that with additional liability coverage.

Progressive advises individuals whose net worth exceeds their maximum liability coverage via their standard insurance policies to open an umbrella policy to avoid any negative financial repercussions.

You might also want to look into umbrella insurance if you're at higher risk of being sued. Never thought of yourself as a target for a lawsuit? You might be surprised at the activities and lifestyle factors that can put you at higher risk of being sued.

According to the Insurance Information Institute (III), those risk factors include things such as:

• Owning a swimming pool and having pool parties
• Renting out a property you own
• Having a dog or a teenage driver in the house

You should also consider opening an umbrella policy if you:

• Are a landlord
• Own property
• Have significant savings or other assets
• Want protection for liability claims against you when traveling outside the U.S.
• Coach kids’ sports
• Often host parties in your home
• Take part in sports in which you could easily injure others — hunting, skiing or surfing
• Are a public figure
• Own watercraft or recreational vehicles

Choosing the right umbrella insurance coverage

Umbrella insurance can help protect your assets if claims exceed your insurance policy limits. This extra coverage can give you peace of mind and often makes sense if your income exceeds your liability coverage, or if you have high-risk situations, such as owning a dog or a swimming pool.

You can buy a liability insurance policy through your home insurer or an independent agent, and you can choose the amount of coverage you want.

Purchasing an umbrella insurance policy can be a helpful way to ensure you’re fully protected if the unexpected happens.

Related Content

• How and When to Switch Home Insurance for the Best Coverage at the Best Price
• Eight Surprising Things Your Home Insurance Won't Cover
• 10 Things You Should Know About Life Insurance
• 8 Ways Seniors Can Save on Car Insurance

Don't skip calculating your Required Minimum Distributions (RMDs) as retirement nears or once you're already retired. You'll avoid hefty tax penalties and keep more of your hard-earned savings intact.

Beyond avoiding fines, calculating RMDs can help you strategize gifting or spending to reduce estate taxes (especially valuable if you're approaching the $15 million federal estate tax exemption in 2026), and can also guide your investment strategy.

Bottom line: Run the numbers early and often. It's a simple step that protects your wealth and opens doors to smarter tax and legacy planning.

What are RMDs?

So, what are RMDs? RMDs are the minimum annual withdrawals you must make each year from most tax-deferred retirement plans (excluding Roth accounts). Because your retirement accounts grow tax-free over time, the government taxes withdrawals through Required Minimum Distributions (RMDs), treated as regular income.

You may be required to take RMDs from your 401(k), 403(b), or other employer-sponsored retirement plans, but here we're focusing on how to calculate RMDs from a traditional Individual Retirement Account (IRA).

Not sure how to calculate your RMD? We’ll walk you through the steps and point you to other practical resources to use. For more detailed information, seek guidance from a qualified financial adviser or tax professional.

When do RMDs start?

Starting RMD withdrawals at the right age is critical. Note that the rules have changed recently.

• In 2020, the SECURE Act increased the age for Required Minimum Distributions (RMDs) from retirement accounts from 70-½ to 72.
• The SECURE 2.0 Act raised the RMD age to 73 for individuals who turn 72 on or after January 1, 2023.
• You must take your first RMD by April 1 of the year following the year you turn 73.
• Starting in 2033, the RMD age will increase to 75 for individuals who turn 74 after December 31, 2032.

Let's say you are a single man who turned 73 in 2024. The balance in your IRA was $254,316 on December 31, 2023, and you estimate it will grow by 5% annually. In 2024 (at age 73), your required minimum distribution was $9,433.96.

As the chart shows, your annual RMD will increase over the next three years, but your account balance will not dip below its original value, assuming it continues to earn the estimated 5% interest.

How to calculate your RMDs

Follow these steps to work out your RMDs for a traditional IRA:
DIY method: Start by determining how much you had in your IRA account as of December 31 of the previous year. Next, you can find your life expectancy factor, or the number of additional years you expect to live, according to actuarial calculations. Divide the account balance by the life expectancy factor to get your RMD.
Simple RMD calculator: Get a quick estimate using our calculator below. Input your retirement account balance, your age and the tool will calculate your RMD.

Note: You must calculate your RMDs for each traditional IRA separately, based on its year-end balance and your life expectancy.

RMD dates to remember

Once you turn 73, it's important to be proactive about following the rules for required minimum distributions for IRAs, or you may face penalties. Also, you can withdraw or use your traditional IRA assets at any time, but a 10% additional tax may apply if you withdraw or use IRA assets before you reach age 59½.

Officially, RMDs are due by December 31 each year, but the IRS gives you flexibility for your first one. You can delay your first RMD (required at age 73 in 2026) until April 1 of the following year. Your first RMD covers 2026 and can be postponed to April 1, 2027.

If you delay your first RMD withdrawal, you must take your second by December 31 of that same year. Taking two RMDs in one year creates two taxable events, which could increase your taxable income and potentially push you into a higher tax bracket.

RMD penalties

The IRS imposes penalties for taking RMDs that are too small. If you withdraw less than required, the IRS charges a 25% penalty (or 10% if corrected within two years) on the difference between what you withdrew and what you should have taken.

You can always take larger distributions, but the RMD sets the minimum withdrawal needed to meet IRS requirements. Withdrawals above the minimum in one year cannot be used to satisfy RMDs in future years.

Which accounts require RMDs?

These retirement accounts will require you to withdraw RMDs (as long as they are not Roth accounts).

• Traditional IRAs
• Traditional 401(k)s
• Nonprofit 403(b) plans
• Government 457 plans
• Simplified Employee Pension (SEP) IRAs
• Savings Incentive Match Plan for Employees (SIMPLE) IRAs
• Profit-sharing plans
• Other defined contribution plans

You must calculate your RMDs for each traditional IRA separately, based on its year-end balance and your life expectancy. However, you can withdraw the total required minimum distribution amount from any combination of your IRA accounts (one or more). This simplifies bookkeeping and allows you to strategically draw down an IRA, such as one with poor performance or underperforming investments.

What are the RMD rules for an inherited IRA?

The IRS states that beneficiaries of inherited IRAs follow specific RMD rules, which vary based on when the original account owner passed away, the beneficiary’s relationship to the account holder, and whether the death occurred before or after January 1, 2020.

Generally, the rules are:
Spousal Options: If you inherit a Traditional, SIMPLE IRA, Rollover, or SEP-IRA from your spouse, you have multiple options, depending on whether your spouse died before or after their RMD start date (age 73 in 2026). A common choice is to transfer the funds to your own IRA, but you can also take a lump-sum distribution or maintain the inherited IRA with specific RMD rules.

Non-Spousal Options: If you inherit an IRA from someone other than your spouse, withdrawal rules depend on your status as a designated beneficiary, eligible designated beneficiary (minor child, disabled individual), or non-individual, such as a trust or estate. For deaths after December 31, 2019, most non-spousal beneficiaries must withdraw all funds within 10 years, with specific RMD requirements for eligible designated beneficiaries.

Read Retirement Topics — Beneficiary on the IRS website to fully understand the rules and how they apply to your personal situation.

Consider RMDs in the context of your broader retirement goals

To better save for retirement, consider all of your options, such as contributing to a 401(k) or IRA, or 403(b). Different accounts may have different fees that can eat into returns, in addition to different tax implications. And you should consider whether you will be required to take minimum distributions once you hit age 73.

Roth IRAs don’t require RMDs, but traditional IRAs and other retirement accounts do.

More resources

Other calculators: Fidelity's RMD tool is one we recommend, as it accounts for your spouse's age and projects your RMDs for future years.

The IRS: Or, go to the source: Visit the IRS website to find additional information on RMDs, such as what they are, the types of retirement plans that require RMDs, the timeline for taking minimum distributions and how the amount is calculated.

We strongly recommend that you seek the advice of a financial services professional with whom you have a fiduciary relationship before making any investment or significant financial decision.

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A good budget helps you reach your spending and savings goals. Work out your proposed household budget by inputting your sources of income and projected expenses into Kiplinger's worksheet below.

You can add and delete rows in each section and change the labels for each expense or income source as much as you like, so the sheet reflects your personal finances. Return and repeat as you track your actual spending.

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This retirement calculator can help you estimate what your retirement savings will be worth in the future. It will also help you determine how much more you need to save each month to meet your retirement goal. Here are some other ways it can help.

Test scenarios: Use the calculator to estimate how much you’ll need to save if you: pay off your mortgage, downsize to a cheaper home or location, or refinance your mortgage. Remember that if you decide to downsize, there could be tax consequences if you realize gains on the sale of your home.

The retirement calculator can also help you decide if paying off your mortgage is something you should focus on while you save for retirement or if it’s better to funnel more money into your retirement nest egg.

It can also help you consider if you should contribute more to your tax-advantaged retirement savings account, push out your retirement date to amass more money or retire earlier. It can be a great way to see if you are on track with your retirement savings goals.

In addition to all that, it is a key tool for creating a retirement-planning checklist.

Protect your privacy: The calculator does not require you to enter an email address, will not contact you, and will not record or track your answers.

In a hurry? U.S. adults estimate that the magic number for retirement savings is $1.46 million, according to a 2026 study by Northwestern Mutual. Of course, that number lacks specificity. You may also have heard about the 80% rule, which says you should aim to save enough so that you can replace 80% of your pre-retirement income each year. That's a decent back-of-the-envelope approach, but also falls far short in terms of specificity.

One quick strategy developed by Fidelity is to target your savings based on your age and salary, as shown in the table below. (Note that Fidelity’s formula assumes a person started saving 15% annually starting at age 25.)

Source: Fidelity Investments

This strategy is a good starting point for estimating how much you need. But don't stop there; to get a clearer sense of whether you're on track for retirement, try out our calculator.

Dive into the details

Like any financial calculator, the output is only as good as the input. So, for a more accurate estimate, gather a few key numbers. But don't be cowed by this list; you can always start with a few inputs to get a sense and return later with more information.

Some of the information to gather includes the following:

Social Security benefits: Find your latest Social Security statement of estimated benefits online, or look for the paper copy mailed each year. If you don't have a Login.gov account, you can create one here.

Private or government pension: You might also need to look up pension statements (if you have one).

Employer-sponsored retirement accounts: Gather up statements from each of your 401(k) plans (whether you have just one or several).

Individual Retirement Accounts (IRAs): Find the balance of any IRAs you may own.

Brokerage accounts: If you have non-retirement investments, you'll need to consider them as well.

Roth accounts: Roth IRAs and Roth 401(k)s also go into the mix. While this calculator doesn't factor in the benefits of their after-tax status, that should be a consideration for future taxes.

Health Savings Accounts (HSAs): You may include the balance in your HSA toward retirement savings, since these funds may be used at any time.

Pro-Tip for Couples: If you and your spouse plan to retire several years apart, run the calculator twice — once for each individual salary and timeline — rather than combining your income into a single, less accurate estimate.

Setting your retirement date: If your retirement timeline falls between our 5-year blocks (for example, you want to retire in 7 years), choose the shorter timeline (5 years). This will give you a more aggressive, safer monthly savings target.

Retirement calculator

We strongly recommend that you seek the advice of a financial services professional with whom you have a fiduciary relationship before making any investment or significant financial decision.

Don't forget about taxes

Be aware that the calculator does not take taxes on your retirement income into account so your spendable income will be less.

The actual results will also depend on how much you contribute to your retirement accounts, how long you live and the returns on your investments.

To better save for retirement, consider all your options, such as contributing to a 401(k), IRA or 403(b).

The accounts may have different fees that can eat into returns, as well as varying tax implications. You should also consider whether there are required minimum distributions (RMDs) at age 75 (for anyone born in 1960 or later), which could create a taxable event. Roth IRAs don’t have RMDs, but traditional IRAs and other retirement accounts do.

Remember healthcare, the potential wild card

Every retirement plan will need to account for the rising cost of healthcare. In particular, you should plan when you'll sign up for Medicare and how you'll cover a health insurance gap before Medicare kicks in. If you're married, you and your spouse will need to align your healthcare strategy. Finally, you should also consider how to pay for long-term care and whether you want to purchase long-term care insurance.

If you plan to retire before age 65 and will need to purchase private health insurance, aim to select a 90% or 100% income replacement level in the calculator to absorb those premium costs until Medicare kicks in.

It's not etched in stone

The calculator is designed to give you an idea of how much you will need in retirement, not an exact figure. It's a useful tool to put you on track or keep you there.

You can play around with the numbers, use them as motivation to increase your spending, or for validation that you are on the right path.

The last thing you should do is be discouraged by the number it churns out. Saving for retirement is a long-term journey that has bumps along the way. It may not be working out as you originally expected, but remember, there are many ways to reach your retirement savings goals.

Related content

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• Want To Retire at 55, 60, 62, 65, 67 or 70? Ask Yourself These Questions First
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• Retirement Savings on Track? How Much You Should Have by 50 and 55

This calculator is for informational and educational purposes only and is not investment advice.