Retirement Savings Calculator

How the retirement calculator works

The calculator projects two things forward to your retirement age and adds them together: what your current savings grow to, and what your monthly contributions grow to. Both grow at your expected annual return, compounded monthly, with each contribution added at the end of the month.

Savings: S × (1 + r)ⁿ

Contributions: C × ((1 + r)ⁿ − 1) ÷ r

S: - your current savings
C: - your monthly contribution
r: - the monthly return: the annual return ÷ 12 ÷ 100
n: - the number of months until retirement: (retirement age − current age) × 12

Worked example

Age 30, retiring at 65, with $20,000 already saved, adding $500 a month at a 7% annual return:

35 years is 420 months, so you pay in $20,000 + $500 × 420 = $230,000.
The projected balance at 65 is $1,130,650.34.
Investment growth is $900,650.34 - almost four times what you paid in.

Why starting early matters

Here is $500 a month at 7%, starting from nothing and continuing to age 65:

Balance at 65 from $500 a month at 7%, by starting age
Start at age	You pay in	Balance at 65	Investment growth
25	$240,000.00	$1,312,406.70	$1,072,406.70
35	$180,000.00	$609,985.50	$429,985.50
45	$120,000.00	$260,463.33	$140,463.33
55	$60,000.00	$86,542.40	$26,542.40

Starting at 25 instead of 35 means paying in an extra $60,000, but ends with about $700,000 more, because the early contributions have the longest time to grow.

How the return rate changes the result

For the worked example above ($20,000 saved plus $500 a month from 30 to 65):

Balance at 65 by annual return
Annual return	Balance at 65
5%	$682,720.58
6%	$874,826.18
7%	$1,130,650.34
8%	$1,472,792.24

One percentage point a year adds up: 6% instead of 7% leaves you about $256,000 short. Investment fees work the same way - a fund that charges 1% more a year has the same effect as a 1% lower return.

Things to keep in mind

Inflation. The result is in future dollars. At 2.5% inflation a year, $1,130,650 in 35 years would buy about what $476,423 buys today. The US Federal Reserve aims for 2% inflation over the longer run; to see results roughly in today's money, enter your expected return minus expected inflation.
Returns vary. Investments rise and fall from year to year. A steady average is a simplification, and the order of good and bad years matters most close to retirement.
Taxes, matching and limits. Tax-advantaged accounts such as a 401(k) or IRA, employer matching and contribution limits all change the outcome; none are modeled here.
Flat contributions. Most people raise their contributions as their income grows - try a higher monthly amount to see the effect.

Frequently asked questions

Does this factor in inflation?

No - the result is in nominal (future) dollars. Pair it with the Inflation Impact Calculator to see what that balance would be worth in today's purchasing power.

What annual return rate should I use?

There's no universal answer - it depends on your investment mix. Many long-term planners use a conservative estimate somewhere in the mid-single digits for diversified portfolios, but you should base it on your own investment strategy.

Does this include Social Security or a pension?

No - this only projects the savings and contributions you enter here. Add any other expected income sources separately when planning your total retirement income.

Why does starting early make such a difference?

Money invested early has more years to compound. At 7%, $500 a month from age 25 grows to $1,312,406.70 by 65, while starting at 35 gives $609,985.50 - less than half, even though you only pay in $60,000 less.

Sources

Compound interest (glossary) - Investor.gov, U.S. Securities and Exchange Commission
Why does the Federal Reserve aim for inflation of 2 percent over the longer run? - Board of Governors of the Federal Reserve System

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