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Retirement Savings Calculator

See how big your nest egg grows by retirement.

How it is calculated

The projection has two parts that are added together: FV = S × (1 + i)n + M × ((1 + i)n − 1) / i. S is the current savings, M the monthly contribution, i = annual_return / 100 / 12 the monthly rate and n = years × 12 the number of months. With a 0% return the result is S + M × n. Contributions are assumed at the end of each month. The "total contributions" line is the starting balance plus all monthly deposits, and growth is the difference from the final value. Inflation, taxes, fees, salary raises and withdrawals are not modelled, and the return is a constant yearly rate, so the answer is in nominal money, not today's purchasing power.

Worked example

You have $25,000 saved, add $500 every month, expect 7% a year and have 30 years to go. Monthly rate: 7 / 100 / 12 ≈ 0.0058333; months: 360. Growth factor: (1 + 0.0058333)360 ≈ 8.1165. Existing savings grow to about $202,912, and the monthly deposits grow to about $609,985. Together: $812,897.93. You put in 25,000 + 500 × 360 = $205,000.00, so growth accounts for $607,897.93.

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Common mistakes

  • Typing the yearly contribution into the monthly field; the tool multiplies it by 12 months again and overstates the result twelvefold.
  • Entering a return that is not net of fees; a fund charging 1% a year earns noticeably less than its headline return over 30 years.
  • Reading the result as today's money: at 7% nominal with inflation the future dollars buy much less than the same figure now.
  • Forgetting the employer match: add it to the monthly contribution yourself if it is paid into the same account.
  • Using years of working life instead of years until you stop contributing, or the reverse; only the years entered are compounded.

Sources

About this calculator

This calculator projects how a retirement fund could grow over a long time horizon by combining an existing balance, regular contributions, an assumed rate of return, and the number of years until retirement, applying compound growth throughout. Small differences in contribution amount or assumed return tend to produce surprisingly large differences in the final projected balance, precisely because the growth compounds over decades rather than months.

People in the early or middle stages of their careers use it to get a sense of whether current contributions, including any employer matching, are on pace to build an adequate nest egg by a target retirement age. It's also used to explore how increasing contributions or adjusting the retirement timeline changes the long-term outcome.

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Comments (1)

  • Editorial team

    Because the return is one constant yearly rate, a single run can look more certain than any real market is. Run the same plan at a low, middle and high return, say 4, 6 and 8 percent, and read the spread rather than one headline figure. Deposits are counted at the end of each month, so the plan is slightly conservative. Would a yearly raise in your contribution be a feature you want here?

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