What this calculator estimates
The retirement calculator projects how much you will have saved by a target retirement age, given what you have today, how much you add each month, and the annual return you expect. It reports the projected total, how much of that is money you contributed, and how much is growth. The purpose is not to produce a single “correct” number — nobody knows future returns — but to show how the levers you control (contribution rate, time, and retirement age) change the outcome.
The formula
The projection combines two pieces of compound-interest math: the future value of your existing balance, and the future value of a stream of regular contributions (an annuity).
FV = P(1 + r)ⁿ + C × ((1 + r)ⁿ − 1) / r
P = current savings C = contribution per period
r = return per period n = number of periodsWith monthly contributions, r is the annual return ÷ 12 and n is years to retirement × 12. The second term is why starting early matters so much: contributions made in year one compound for the entire horizon, while contributions made in the final year barely grow at all.
Worked example
Age 30, retiring at 65, with $20,000 saved and $500/month contributions at a 7% average annual return (35 years, 420 months, monthly rate ≈ 0.5833%).
Existing balance: 20000 × (1.005833)⁴²⁰ ≈ $228,000
Contributions: 500 × ((1.005833)⁴²⁰ − 1) / 0.005833 ≈ $900,000
Total ≈ $1,128,000 (of which $230,000 contributed, $898,000 growth)Roughly 80% of the final balance is investment growth rather than money you put in. Delay the start to age 40 with the same inputs and the total falls to about $530,000 — losing ten years costs more than half the outcome.
How much do you actually need?
A common planning shortcut is the 4% rule: a diversified portfolio has historically supported withdrawing about 4% of its starting value each year, adjusted for inflation, for 30 years. Turned around, that means you need roughly 25× your desired annual spending.
| Annual spending needed | Target nest egg (25×) | Monthly at 4% |
|---|---|---|
| $30,000 | $750,000 | $2,500 |
| $50,000 | $1,250,000 | $4,167 |
| $80,000 | $2,000,000 | $6,667 |
| $120,000 | $3,000,000 | $10,000 |
Subtract expected pension or Social Security income from your spending need before multiplying. If you plan to retire before 60 or expect a 40-year retirement, many planners suggest a more conservative 3–3.5% withdrawal rate.
Choosing a return assumption
- Nominal vs real. A 7% nominal return with 3% inflation is about a 4% real return. If you enter a nominal rate, the result is in future dollars that will buy less; if you enter a real rate, the result is in today's purchasing power. Both are valid — just be consistent.
- Historical ranges. Broad US stock indexes have averaged roughly 10% nominal over long periods; bonds 4–5%; a 60/40 mix around 7–8%. Past performance is a reference point, not a promise.
- Fees compound too. A 1% annual fee on a 7% return leaves you with 6%. On the example above, that single point reduces the final balance by roughly $230,000.
- Sequence risk. The calculator assumes a smooth return every year. Real markets deliver the average unevenly, and a bad stretch right before or after retirement hurts more than the same stretch in your thirties.
Practical levers, ranked by impact
- Start now. Time is the input you cannot buy back later.
- Capture any employer match. A 50% match on contributions is an immediate 50% return — nothing else comes close.
- Raise contributions with each pay rise. Increasing from $500 to $700/month in the example adds about $360,000 to the final balance.
- Use tax-advantaged accounts first (401(k), IRA, ISA, superannuation, or your country's equivalent) so growth is not eroded by annual tax.
- Working two more years both adds contributions and shortens the period the money must last — often worth more than any investment tweak.