Retirement Calculator

Use this Retirement Calculator to estimate how your current savings and monthly contributions may grow by retirement. It can also estimate the effect of inflation and compare your projected savings with a retirement-income target.

Important: Retirement projections are estimates, not guarantees. Investment returns, inflation, taxes, fees, and future income can differ significantly from the assumptions entered.

Retirement Calculation Method

First calculate the time remaining:

Years to retirement = retirement age − current age

Number of months = years to retirement × 12

The calculator converts the expected annual return to a monthly rate:

Monthly rate = annual return ÷ 12 ÷ 100

Growth of current savings:

FV of savings = current savings × (1 + r)ⁿ

Growth of monthly contributions:

FV of contributions = monthly contribution × [((1 + r)ⁿ − 1) ÷ r]

Then:

Projected retirement savings = FV of savings + FV of contributions

Where r is the monthly return rate and n is the number of monthly contribution periods.

Inflation-Adjusted Value

To express future savings in approximately today’s purchasing power:

Inflation-adjusted value = projected savings ÷ (1 + inflation rate)^years

Retirement Income Target

If you enter a desired annual retirement income and withdrawal rate:

Required nest egg = desired yearly income ÷ withdrawal rate

Retirement gap or surplus = projected savings − required nest egg

The withdrawal rate is an assumption, not a guaranteed sustainable rate.

Example

Suppose you are 35 years old and plan to retire at 65 with:

• $50,000 currently saved
• $500 monthly contributions
• 6% expected annual return
• 3% annual inflation
• $45,000 desired yearly retirement income
• 4% assumed withdrawal rate

You have 30 years, or 360 monthly contribution periods, until retirement.

Using the calculator’s monthly compounding method, projected retirement savings are approximately:

$803,386

Total personal contributions are:

$50,000 + ($500 × 360) = $230,000

Estimated investment growth is therefore approximately:

$803,386 − $230,000 = $573,386

At 3% annual inflation, the projected balance has an estimated present purchasing-power value of about:

$330,985

Using a 4% withdrawal-rate assumption:

Required nest egg = $45,000 ÷ 0.04 = $1,125,000

Compared with the projected $803,386 balance, this produces an estimated retirement gap of approximately $321,614.

Important Notes

• The expected annual return is an assumption. Actual investment returns can vary substantially from year to year.
• The calculation assumes regular monthly contributions and constant compound growth.
• Investment fees and expenses are not deducted automatically and can materially reduce long-term results.
• Taxes and the tax treatment of retirement accounts are not included.
• Inflation may be higher or lower than the rate entered.
• Pensions, Social Security, state benefits, employer contributions, annuities, and other retirement income are not automatically included.
• Healthcare expenses, life expectancy, market losses during retirement, and changes in spending are not modeled.
• A withdrawal-rate calculation is a simplified planning target and does not guarantee that savings will last throughout retirement.

Dollar-value note: Keep your assumptions consistent when comparing the retirement target with projected savings. If your desired retirement income is expressed in today’s dollars, inflation should also be considered when estimating the future income target.

Use several return, inflation, contribution, retirement-age, and withdrawal-rate scenarios rather than relying on a single projection.

Sources

• Investor.gov — Compound Interest Calculator
• Investor.gov — Financial Planning and Retirement Tools
• U.S. Securities and Exchange Commission — How Fees and Expenses Affect Your Investment Portfolio
• Social Security Administration — Retirement Benefits Calculator