Retirement Calculator
Plan your retirement savings and see if you're on track. Compare your projected savings against your desired retirement income.
About this Calculator
Plan your retirement savings and see if you're on track. Compare your projected savings against your desired retirement income.
Formula & Calculations
Formula
FV = P(1+r)^n + C[((1+r)^n - 1)/r], Withdrawal = FV × r / (1 - (1+r)^(-w))Where:
- FV=Future value of retirement savings at retirement age
- P=Current retirement savings
- C=Monthly contribution amount
- r=Monthly expected rate of return
- n=Number of months until retirement
- w=Number of months in retirement (life expectancy minus retirement age)
Assumptions
- Assumes a constant annual rate of return before and during retirement.
- Assumes contributions are made at the end of each month.
- Does not account for Social Security benefits, taxes, or inflation.
- Withdrawal calculation uses a standard annuity payout formula depleting the balance to zero.
Calculation Examples
Example 1
Starting at 30 with consistent contributions, this person exceeds their retirement income goal with a comfortable surplus.
Example 2
Starting later at 45 means less time for compound growth, resulting in a shortfall of about $7,300 per year. Increasing contributions or retirement age would help.
Example 3
Starting early at 25 with 35 years of growth at 8% produces over $1.5 million, far exceeding the desired retirement income.
Frequently Asked Questions
How much do I need to retire?
A common rule of thumb is the 4% rule: you need savings of 25 times your annual expenses to safely withdraw 4% per year adjusted for inflation over a 30-year retirement. However, individual circumstances vary greatly.
What if I'm behind on retirement savings?
If you're behind, focus on increasing your savings rate immediately, consider delaying retirement by a few years, and take advantage of catch-up contributions if you're over 50. Every additional year of saving and compounding makes a significant difference.