Retirement Calculator
Estimate how much you need to save to reach your retirement goals and see how your investments can grow over time.
What the retirement calculator does
The retirement calculator projects the balance you could have at a chosen retirement age. Enter your current age, the age you plan to retire, what you have saved so far, what you add each month, and the annual return you expect. The tool compounds the existing balance and every future contribution month by month until the retirement date and reports the projected total.
How the projection is calculated
The number of months is (retirement age − current age) × 12, and the monthly rate is the annual return ÷ 12. The current balance grows for the full period, and each monthly contribution grows from the month it is made:
FV = P × (1 + i)n + Σ C × (1 + i)n − k for k = 1 … n
where P is current savings, C the monthly contribution, i the monthly rate and n the number of months. The sum is the future value of an ordinary annuity, C × [((1 + i)n − 1) / i].
Worked examples
| Age now | Retire at | Saved | Monthly | Return | Projected balance |
|---|---|---|---|---|---|
| 25 | 65 | $5,000 | $400 | 7% | $1,130,000 |
| 35 | 65 | $40,000 | $600 | 7% | $1,060,000 |
| 45 | 67 | $120,000 | $1,000 | 6% | $990,000 |
| 55 | 67 | $300,000 | $1,500 | 5% | $840,000 |
Rounded to the nearest $10,000. The 25-year-old contributes $192,000 in total and ends with over a million; the 55-year-old contributes $216,000 on top of a much larger starting balance and ends with less. Time in the market is the dominant factor.
Choosing the return
Enter a return that matches your asset mix. Historically, a portfolio mostly in stocks has returned about 10% a year before inflation and 7% after; a 60/40 mix about 8% and 5%. Use the after-inflation figure if you want the answer in today’s purchasing power, which is the more useful way to compare against current living costs. Many planners assume 5 to 6% real for a stock-heavy portfolio and 3 to 4% for a balanced one, to leave a margin for fees and weaker future returns.
From balance to retirement income
A rule of thumb is that a diversified portfolio can sustain withdrawals of about 4% of the starting balance, adjusted for inflation each year, for 30 years. $1,060,000 therefore supports about $42,000 a year on top of Social Security or a pension. To work backwards from a target income, divide the annual amount you need from savings by 0.04: $30,000 a year requires $750,000. The retirement age calculator solves for the age at which your projection reaches such a target, and the pension calculator estimates defined-benefit income to subtract first.
Levers that change the result
| Change (35-year-old example) | Projected balance | Effect |
|---|---|---|
| Baseline: $600/month, 7%, retire at 65 | $1,060,000 | |
| Contribute $800 instead of $600 | $1,300,000 | +$240,000 |
| Retire at 67 instead of 65 | $1,230,000 | +$170,000 |
| Return 6% instead of 7% (higher fees) | $840,000 | −$220,000 |
| Start five years later, at 40 | $720,000 | −$340,000 |
What the model leaves out
Returns are assumed constant; real markets deliver them unevenly, and a poor decade just before retirement hurts more than the same decade early on. Contributions are assumed flat, though most people raise them with pay. Taxes, fees and employer matching are not modelled; a 50% match on your contribution is equivalent to entering a 50% larger monthly figure. Treat the output as a midpoint and test a return 2 points lower for a cautious case.
Related tools
The retirement savings calculator takes years instead of ages. The compound interest calculator and future value calculator isolate the growth of a lump sum, the investment growth calculator handles other contribution patterns, and the net worth projection calculator adds property and debts to the picture. The mortgage calculator helps decide whether paying off a home loan before retirement is a better use of surplus cash.
External references
- Social Security Administration: retirement benefit estimator
- U.S. SEC Investor.gov: compound interest calculator
Frequently asked questions
Is one million dollars enough to retire?
At a 4% withdrawal rate it provides about $40,000 a year before tax. Whether that is enough depends on your other income and spending; the cost of living calculator gives the number to compare against.
Should I use a nominal or real return?
Real, if you want a balance you can compare with today’s prices. Nominal, if you want the number that will actually appear on the statement.
What if my contributions will increase?
Run the calculator in stages, using the balance from one stage as the current savings for the next with the higher contribution.
Does a later retirement age help much?
Yes, twice over: more years of contributions and growth, and fewer years of withdrawals. Two extra years added about 16% to the balance in the example above.
How much should I contribute?
Common guidance is 15% of gross income including any employer match, from your twenties. Starting later needs a higher percentage; the calculator shows how much.