Estimate your potential retirement income and required nest egg based on your current savings and expected return. This tool is for illustrative purposes and does not constitute financial advice.
Your Retirement Outlook
Estimated Nest Egg at Retirement:
$0.00
Estimated Monthly Retirement Income:
$0.00
Understanding Your Retirement Projections
This calculator provides an estimation of your potential retirement savings and income. It's a simplified model based on several key inputs and financial principles.
How it Works:
The calculator projects your savings forward to your target retirement age, factoring in your current savings, ongoing contributions, and the expected growth rate of your investments. It then estimates your potential monthly income based on your desired annual income.
Key Inputs Explained:
Current Retirement Savings: The total amount you have accumulated in retirement accounts (e.g., 401k, IRA) today.
Annual Contributions: The total amount you plan to save annually from your income towards retirement.
Expected Annual Investment Return (%): The average annual percentage growth you anticipate from your investments. This is a crucial variable; higher returns lead to faster growth but also involve higher risk.
Target Retirement Age: The age at which you plan to stop working full-time.
Current Age: Your age today, used to determine the number of years until retirement.
Desired Annual Retirement Income: The annual income you aim to have in retirement to maintain your desired lifestyle.
The Math Behind the Projections:
The core of the calculation involves a future value of an annuity formula combined with the future value of a lump sum.
1. Years to Retirement: Calculated as retirementAge - currentAge.
2. Future Value of Current Savings (Lump Sum): FV_lump_sum = currentSavings * (1 + annualReturnRate)^yearsToRetirement
3. Future Value of Annual Contributions (Ordinary Annuity): FV_annuity = annualContributions * [((1 + annualReturnRate)^yearsToRetirement - 1) / annualReturnRate]
4. Total Nest Egg at Retirement: totalRetirementNestEgg = FV_lump_sum + FV_annuity
5. Estimated Monthly Retirement Income:
This is a simplified calculation. Often, financial planners use withdrawal rate guidelines (like the 4% rule). For this calculator, we're directly deriving it from your desired annual income, assuming you have saved enough to support it: retirementIncomePerMonth = desiredAnnualIncome / 12
Note: This calculator does not factor in inflation, taxes, changes in contribution amounts, variable investment returns, or specific withdrawal strategies. For personalized advice, consult a qualified financial advisor.
Disclaimer:
The Merril Lynch Retirement Planning Calculator is a tool for estimation and educational purposes only. It does not provide financial, investment, or tax advice. All projections are hypothetical and based on the assumptions entered. Actual results may vary significantly. Consult with a financial professional for advice tailored to your specific situation.
function calculateRetirement() {
var currentSavings = parseFloat(document.getElementById("currentSavings").value);
var annualContributions = parseFloat(document.getElementById("annualContributions").value);
var expectedAnnualReturn = parseFloat(document.getElementById("expectedAnnualReturn").value) / 100; // Convert percentage to decimal
var retirementAge = parseInt(document.getElementById("retirementAge").value);
var currentAge = parseInt(document.getElementById("currentAge").value);
var desiredAnnualIncome = parseFloat(document.getElementById("desiredAnnualIncome").value);
// Basic validation for numeric inputs
if (isNaN(currentSavings) || isNaN(annualContributions) || isNaN(expectedAnnualReturn) || isNaN(retirementAge) || isNaN(currentAge) || isNaN(desiredAnnualIncome)) {
alert("Please enter valid numbers for all fields.");
return;
}
// Further validation for logical ranges
if (retirementAge <= currentAge) {
alert("Target retirement age must be greater than current age.");
return;
}
if (currentSavings < 0 || annualContributions < 0 || desiredAnnualIncome < 0) {
alert("Financial values cannot be negative.");
return;
}
var yearsToRetirement = retirementAge – currentAge;
// Calculate Future Value of Current Savings (Lump Sum)
var fvLumpSum = currentSavings * Math.pow(1 + expectedAnnualReturn, yearsToRetirement);
// Calculate Future Value of Annual Contributions (Ordinary Annuity)
var fvAnnuity = 0;
// Handle the case where expectedAnnualReturn is zero to avoid division by zero
if (expectedAnnualReturn === 0) {
fvAnnuity = annualContributions * yearsToRetirement;
} else {
fvAnnuity = annualContributions * (Math.pow(1 + expectedAnnualReturn, yearsToRetirement) – 1) / expectedAnnualReturn;
}
// Total Nest Egg at Retirement
var totalRetirementNestEgg = fvLumpSum + fvAnnuity;
// Estimated Monthly Retirement Income (simplified from desired annual income)
var retirementIncomePerMonth = desiredAnnualIncome / 12;
// Display Results
document.getElementById("totalRetirementNestEgg").innerText = "$" + totalRetirementNestEgg.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
document.getElementById("retirementIncomePerMonth").innerText = "$" + retirementIncomePerMonth.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}