Retirement Savings Calculator
Determine how much your savings will grow by the time you retire and see your estimated monthly income.
Total amount currently in 401k, IRAs, etc.
How much you save per month.
Average historical stock market return is ~7-10%.
Average inflation is typically 2-3%.
Total at Retirement (Future Value)
$0
Total at Retirement (Today's Dollars)
$0
Total Interest Earned
$0
Est. Monthly Income (4% Rule)
$0
How to Plan for Retirement Effectively
Planning for retirement is one of the most critical financial tasks you will undertake. The Retirement Savings Calculator helps you visualize the power of compound interest and the importance of starting early. By inputting your current savings, contributions, and expected returns, you can estimate if you are on track to meet your financial goals.
Understanding the Key Metrics
When using this calculator, it is important to understand the variables that affect your final number:
- Compound Interest: This is "interest on interest." The longer your money is invested, the more it grows exponentially. Even small increases in your annual return rate can lead to massive differences over 20 or 30 years.
- Inflation: Inflation reduces the purchasing power of your money over time. While you might have $1 million in the future, it won't buy as much as $1 million does today. This calculator provides an "Inflation Adjusted" figure to give you a realistic view of your wealth.
- Monthly Contribution: Consistency is key. Increasing your monthly contribution by even $50 or $100 can cut years off your working life.
The 4% Withdrawal Rule
A common question is: "How much income will my savings generate?" Financial planners often cite the 4% Rule. This rule suggests that you can withdraw 4% of your total portfolio in the first year of retirement, and adjust that amount for inflation in subsequent years, with a high probability of not running out of money for 30 years.
Our calculator estimates your monthly income based on this conservative withdrawal rate, giving you a tangible idea of your future lifestyle budget.
Factors That Influence Investment Returns
While the S&P 500 has historically returned about 10% annually before inflation, a safer planning estimate is often 6-8%. Factors influencing this include:
- Asset Allocation: A mix of stocks and bonds is typically safer but may yield lower returns than 100% stocks.
- Fees: Expense ratios on mutual funds and management fees can eat into your returns. Aim for low-cost index funds.
- Market Volatility: Markets go up and down. A long-term horizon allows you to ride out downturns.
Use the calculator above to experiment with different scenarios. See what happens if you retire 5 years later, or if you increase your savings rate by 1%. The results might surprise you.