How this Retirement Savings Calculator works

A retirement plan is basically a “future value problem”: you have some money today (your current savings), you add money over time (monthly contributions), and your investments grow (annual return). This calculator projects that path until your retirement age, then summarizes the results in a way that’s easy to screenshot and share.

The output is intentionally simple and practical: (1) how much you might have at retirement, (2) how much of that came from your own contributions versus growth, and (3) what that might translate into as a monthly retirement “paycheck” using a safe withdrawal rate (like 4%).

First, we compute the number of years and months you have until retirement: yearsToRetire = retirementAge − currentAge and months = yearsToRetire × 12. If your retirement age is not greater than your current age, the calculator stops and asks you to fix the inputs.

Most contributions happen monthly, so we convert the annual return into a monthly growth rate. If your expected annual return is R, then: r = (1 + R)^(1/12) − 1. This is a compounding-aware conversion (slightly more accurate than dividing by 12).

Each month, your balance grows by the monthly rate, then you add your contribution. Conceptually, the balance evolution looks like:

• balance = balance × (1 + r) + contribution (repeated for each month)
• We also keep track of total contributed dollars (so you can see how much you personally put in).

A twist that makes this retirement tool more realistic (and more useful): optional contribution growth. Many people increase contributions as income rises. If your contribution increase is g per year, the calculator increases the monthly contribution slightly every 12 months by multiplying by (1 + g).

After simulating all months, we compute: investmentGrowth = finalBalance − totalContributed − startingSavings. This “growth” number is what people usually mean by “my money made money.”

Nominal dollars can be misleading because $1 in the future likely buys less than $1 today. If your inflation rate is I, we discount the final balance back into today’s dollars: realBalance = finalBalance ÷ (1 + I)^(yearsToRetire). This is a simplified way to show purchasing power.

To turn a nest egg into an “income estimate,” we use a withdrawal rate. For example, a 4% withdrawal rate means withdrawing about 4% of the portfolio per year: annualIncome ≈ finalBalance × (withdrawalRate / 100) and monthlyIncome ≈ annualIncome / 12. This is not a promise—just a commonly used rule-of-thumb for planning.

Suppose you’re 30, want to retire at 65, have $25,000 saved, contribute $500/month, expect a 7% annual return, inflation is 2.5%, and you increase contributions by 3% each year. The calculator simulates 35 years of monthly growth and deposits. You’ll typically see:

• A final projected retirement balance (nominal dollars).
• Total contributed dollars (your cash input over time).
• Investment growth (the compounding effect).
• An inflation-adjusted balance (today’s dollars).
• A monthly income estimate using your withdrawal rate.

Now do the same run with a 5% return and again with a 9% return. You’ll get a “range” that helps you plan without pretending the future is certain. That range is the whole point of planning tools like this.

• Screenshot your “Balance at retirement” and share it as a goal post.
• Run two scenarios: “I start now” vs “I wait 5 years.” Share the difference.
• Try boosting contributions by $50/month and share the before/after.
• Use it as a challenge with friends: who can hit $1M first (on paper)?

Reminder: This calculator ignores taxes, employer match, investment fees, and year-to-year volatility. For real planning, consider additional tools like a 401(k) growth calculator or retirement withdrawal calculator.

Frequently Asked Questions

• Is this retirement calculator “accurate”?

  It’s accurate for the assumptions you enter (steady return, steady contributions, steady inflation). Real life is messier. Use it for planning and comparison, not as a guarantee.

• Should I use nominal or real returns?

  This calculator asks for a nominal return and then shows a separate inflation-adjusted balance. If you prefer, you can set inflation to 0% and input a “real return” instead. Just be consistent.

• What’s a good safe withdrawal rate?

  Many people start with 4% as a planning rule-of-thumb. More conservative plans use 3–3.5%, while higher rates increase the risk of running out. Use the slider to see how it changes your income estimate.

• Does this include Social Security / pensions?

  No. This tool models only your investment portfolio. You can treat Social Security/pensions as “extra income” in retirement and use this calculator to estimate the portfolio piece.

• What if I increase contributions over time?

  That’s what “annual contribution increase” is for. Even a small annual increase can compound dramatically, because the later years usually contribute the biggest growth.

• Why does waiting a few years matter so much?

  Compounding needs time. Early dollars get more “growth years.” When you delay, you lose those growth years, which can reduce the final total more than people expect.