Retirement Calculator
Calculate how much you will have saved by retirement based on your current age, savings, monthly contributions, and expected return rate.
Retirement savings planning answers two core questions: “How much do I need to retire?” and “Will my savings get there?” Both use compound interest and withdrawal rate formulas to project future values and required savings rates.
Retirement nest egg target formula: Required Savings = Annual Retirement Expenses / Safe Withdrawal Rate
The 4% Rule (Bengen, 1994) suggests withdrawing 4% of your portfolio in year 1, then adjusting for inflation annually, gives a 95%+ probability of lasting 30 years based on historical U.S. market data. Target = Annual Expenses × 25
Future value of current savings: FV = PV × (1 + r)^n
Future value of recurring contributions: FV = PMT × ((1 + r)^n − 1) / r
Where:
- PV = current savings balance
- PMT = monthly contribution
- r = monthly return rate (annual / 12)
- n = months until retirement
Required monthly contribution to reach goal: PMT = (Goal − PV × (1+r)^n) × r / ((1+r)^n − 1)
Worked example: Age 30, current savings: $25,000. Goal: $1,500,000 by age 65. Expected 7% annual return.
n = 35 years = 420 months. r = 7%/12 = 0.5833%/month. FV of existing savings = $25,000 × (1.07)^35 = $25,000 × 10.677 = $266,925 Remaining gap = $1,500,000 − $266,925 = $1,233,075 Monthly contribution needed = $1,233,075 × 0.005833 / ((1.005833)^420 − 1) = $894/month
Annual retirement spending covered at 4%: $1,500,000 × 0.04 = $60,000/year
Key leverage points: Starting 5 years earlier at age 25 reduces required monthly savings by ~35%. Employer 401(k) match effectively doubles contribution power. Tax-advantaged accounts (401k, IRA, Roth) compound faster due to deferred or eliminated taxes.