Retirement Savings Calculator
Planning for retirement is one of the most important financial goals. This calculator helps you estimate the future value of your retirement savings (like a 401(k) or an IRA) based on your current savings, contributions, and expected rate of return.
Your Estimated Retirement Nest Egg
How Our Retirement Savings Calculator Works
This retirement savings calculator uses the well-known future value formula to estimate how much your savings can grow over time. It factors in your current savings, monthly contributions, expected annual rate of return, and the number of years until retirement. The calculation assumes monthly compounding, which more accurately reflects how investments grow compared to annual compounding.
The number of years for your investment growth is calculated as:
(Retirement Age – Current Age).
This means if you’re currently 30 years old and plan to retire at 65, your savings will be projected over a 35-year period.
Formula Used:
FV = P(1 + r/n)^(nt) + PMT × [ ((1 + r/n)^(nt) - 1) / (r/n) ]- P = Current Savings (Principal)
- PMT = Monthly Contribution
- r = Annual Rate of Return (as a decimal)
- n = Number of compounding periods per year (12 for monthly compounding)
- t = Total Years to Grow (Retirement Age – Current Age)
By combining both your initial investment and regular contributions, this formula projects the total future value of your retirement savings. This approach helps you understand the power of compound interest and how consistent saving can significantly increase your wealth over time.
Retirement Calculator – Frequently Asked Questions
What is a realistic annual return rate for retirement planning?
Historically, the average stock market return after inflation has been around 7–10% per year. However, returns are never guaranteed. For long-term financial planning, many experts recommend using a more conservative rate of 5–6% to account for potential market fluctuations. Your actual return will depend on your investment choices, risk tolerance, and market performance.
Does this retirement calculator account for inflation?
No, this calculator shows the future value in today’s dollars and does not automatically adjust for inflation. To estimate the impact of inflation on your savings, subtract your expected inflation rate (typically 2–3% annually) from your projected annual return rate. This will give you a more realistic picture of your future purchasing power in retirement.