Retirement Savings Calculator
Project how much you will have at retirement based on savings rate, return, and time horizon.
All projections use compound interest (monthly compounding) and run live in your browser. Results are estimates, actual returns will vary.
What Is the Retirement Savings Calculator?
This calculator projects your retirement portfolio balance using monthly compounding. Enter current savings, monthly contributions, expected annual return, and years to retirement. It shows inflation-adjusted real value, monthly income estimate using the safe withdrawal rate, and a year-by-year growth chart.
- ›All projections use monthly compounding (most accurate for regular contributions)
- ›Real value adjusts for inflation, shows purchasing power in today's dollars
- ›The 4% rule withdrawal rate is configurable (default 4%)
- ›Milestone table shows balance at key intervals throughout the accumulation period
Formula
Compound Growth Formulas (monthly compounding)
Future Value
FV = PV(1+r)ⁿ + PMT×((1+r)ⁿ−1)/r
Monthly rate
r = annual_rate / 12
Periods n
n = years × 12
Real Value
Real = FV / (1 + inflation)^years
4% Rule withdrawal
Annual income = FV × 0.04
Nest egg needed
FV = annual_income / 0.04
How to Use
- 1Enter your current retirement savings balance (0 if starting fresh)
- 2Enter your monthly contribution (e.g., 401k + IRA + personal)
- 3Set expected annual return rate, 6–7% real is a conservative historical estimate
- 4Enter years to retirement and expected inflation rate
- 5Optionally adjust the withdrawal rate (default 4%) for your income estimate
- 6Click "Project Retirement" to see balance, chart, real value, and milestones
Example Calculation
Age 35, 30 years to retirement:
Monthly contribution: $500
Annual return: 7% (r/month = 0.5833%)
n = 360 months
FV (lump sum) = 25,000 × (1.00583)³⁶⁰ = $202,590
FV (contributions) = 500 × ((1.00583)³⁶⁰ − 1)/0.00583 = $605,498
Total FV = $808,088
At 3% inflation: Real = $808,088 / (1.03)³⁰ = $333,000
Monthly income (4%): $808,088 × 0.04 / 12 = $2,694/mo
The power of starting early
Starting at 25 instead of 35 (same contributions, 7% return): 10 extra years roughly doubles the balance. An extra decade of compounding adds more wealth than any increase in contributions.
Understanding Retirement Savings
Retirement Planning Benchmarks
| Age | Savings target (×salary) | Monthly rate needed | Notes |
|---|---|---|---|
| 25 | 1× salary | 10–12% | Start early, leverage time |
| 30 | 1.5× salary | 12–15% | Catch up if behind |
| 40 | 3× salary | 15–20% | Mid-career checkpoint |
| 50 | 6× salary | 20–25% | Final push, catch-up allowed |
| 60 | 8× salary | 25%+ | Near retirement, review plan |
| 65 | 10–12× salary | — | Ready for 4% rule withdrawals |
Frequently Asked Questions
What is the 4% rule?
The 4% rule emerged from William Bengen's 1994 analysis of historical US market data. It provides a starting withdrawal rate that has historically survived all 30-year retirement periods in the data.
- ›Nest egg needed = annual income needed / 0.04 = 25× annual expenses
- ›Need $60,000/year: need $1,500,000 saved
- ›Lower withdrawal rates (3.5–3.75%) are safer for 40+ year retirements
- ›Social Security and pension income reduce the amount you need to withdraw
What annual return should I use?
Historical returns are not guaranteed to repeat, but provide a baseline. Adjusting for inflation gives a more meaningful picture of real purchasing power growth.
- ›US stocks (S&P 500): ~10% nominal, ~7% real (1928–2023 average)
- ›Bonds (10-year Treasury): ~5% nominal, ~2% real
- ›60/40 portfolio: ~8% nominal, ~5% real historically
- ›Conservative planning: use 5–6% to build in a margin of safety
How much do I need to save each month?
The general rule of thumb is to save 10–15% of gross income, but the right number depends on when you start, your target income, and other income sources.
- ›Starting at 25: ~10–12% of income may be sufficient at 7% return
- ›Starting at 35: ~15–20% needed to reach the same goal
- ›Starting at 45: ~25–35% required, much harder to catch up
- ›Maximize tax-advantaged accounts first (401k match, IRA, Roth IRA)
What is inflation-adjusted (real) value?
A million dollars in 30 years at 3% inflation buys what $412,000 buys today. The nominal balance grows, but inflation erodes its purchasing power.
- ›Real value = Nominal FV / (1 + inflation_rate)^years
- ›At 3% inflation over 30 years: $1M nominal = $412K real
- ›At 2% inflation over 30 years: $1M nominal = $552K real
- ›Always plan for real (inflation-adjusted) income needs, not nominal
Should I use a Roth or traditional retirement account?
The tax treatment is the critical difference. Both grow tax-deferred or tax-free, the question is when taxes are paid.
- ›Roth IRA/401k: pay taxes now, no taxes in retirement (good for young, lower bracket)
- ›Traditional IRA/401k: defer taxes, pay in retirement (good if retiring in lower bracket)
- ›Rule of thumb: Roth if current tax rate ≤ expected retirement tax rate
- ›2024 contribution limits: $7,000 IRA, $23,000 401k (plus catch-up if 50+)
What is sequence of returns risk?
Early retirement withdrawals combined with market downturns can lock in losses before recovery, depleting the portfolio faster than average returns would suggest.
- ›Strategies: keep 2 years of cash reserves, use dynamic withdrawal rules
- ›Bond tent: increase bonds before retirement, reduce after (protects early years)
- ›Part-time income in early retirement dramatically reduces the risk
- ›The bucket strategy separates near-term cash from long-term growth assets
How accurate are these projections?
The calculation assumes a constant annual return compounded monthly. Real markets have volatility, not smooth returns. Use the result for planning decisions, not exact predictions.
- ›Constant-return models overestimate final balance vs. volatile portfolios (Jensen's inequality)
- ›Use lower return assumptions (5–6% vs. 7%) as a safety margin
- ›Revisit projections annually and adjust contributions as life circumstances change
- ›Consider Monte Carlo simulations for more sophisticated probability-based planning