Retirement Savings & Growth Calculator
Estimated Savings at Retirement
At age , your total nest egg will be:
*This figure is adjusted for inflation to reflect future purchasing power in today's dollars.
Understanding Your Retirement Savings Projection
Planning for retirement is one of the most significant financial tasks you will ever undertake. A retirement savings calculator helps you visualize how today's habits translate into tomorrow's security. By accounting for compound interest and inflation, you can estimate the "real" value of your future wealth.
The Impact of Compound Interest
Compound interest is often called the eighth wonder of the world. It is the process where your earnings earn more earnings. The longer your money stays invested, the faster it grows. This calculator uses a monthly compounding formula to simulate how a standard brokerage account or 401(k) might perform over decades.
If you are 25 years old with $5,000 saved and you contribute $400 every month until age 65, with a 7% annual return and 2.5% inflation, you aren't just saving the principal. While your total contributions would be $197,000, your final nest egg (in today's purchasing power) would be approximately $442,520 thanks to growth.
Why Inflation Matters
A million dollars today will not buy the same amount of goods 30 years from now. That is why our calculator allows you to input an inflation rate. We subtract the inflation rate from your expected return to provide a "Real Rate of Return." This ensures the final result represents what that money could actually buy in today's economy.
Key Factors to Consider
- Risk Tolerance: Higher returns usually come with higher volatility. Most long-term investors aim for 6-8% in a diversified stock portfolio.
- Consistency: Increasing your monthly contribution by even $50 can result in tens of thousands of dollars more by retirement.
- Starting Early: Time is your greatest asset. Starting at age 20 vs. age 30 can literally double your final result with the same monthly effort.