Ramsey Calculator

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Ramsey Investment & Retirement Calculator

*Dave Ramsey typically suggests a 12% average annual return.

Estimated Retirement Totals

At age , your investment could be worth:

Total Contributions:
Total Interest Earned:
function calculateRamseyBalance() { var currentAge = parseFloat(document.getElementById('currentAge').value); var retirementAge = parseFloat(document.getElementById('retirementAge').value); var startingBalance = parseFloat(document.getElementById('startingBalance').value); var monthlyContribution = parseFloat(document.getElementById('monthlyContribution').value); var annualReturn = parseFloat(document.getElementById('annualReturn').value); if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(startingBalance) || isNaN(monthlyContribution) || isNaN(annualReturn)) { alert("Please enter valid numbers in all fields."); return; } if (retirementAge <= currentAge) { alert("Retirement age must be greater than current age."); return; } var years = retirementAge – currentAge; var months = years * 12; var monthlyRate = (annualReturn / 100) / 12; // Future Value of a single sum: FV = P(1 + r)^n var fvStartingBalance = startingBalance * Math.pow(1 + monthlyRate, months); // Future Value of an ordinary annuity: FV = PMT * [((1 + r)^n – 1) / r] var fvAnnuity = monthlyContribution * ((Math.pow(1 + monthlyRate, months) – 1) / monthlyRate); var totalValue = fvStartingBalance + fvAnnuity; var totalContributed = startingBalance + (monthlyContribution * months); var totalInterest = totalValue – totalContributed; document.getElementById('resAge').innerText = retirementAge; document.getElementById('resTotal').innerText = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(totalValue); document.getElementById('resCont').innerText = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(totalContributed); document.getElementById('resInt').innerText = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD' }).format(totalInterest); document.getElementById('ramseyResult').style.display = 'block'; }

How the Ramsey Investment Strategy Works

The Ramsey Investment approach, popularized by financial expert Dave Ramsey, focuses on consistent, long-term wealth building through mutual funds. This calculator helps you visualize "Baby Step 4," which encourages individuals to invest 15% of their gross household income into tax-advantaged retirement accounts.

The Power of Compound Interest

The core philosophy behind the Ramsey method is the mathematical miracle of compound interest. By starting early and maintaining a steady monthly contribution, even modest amounts can grow into a multi-million dollar nest egg over several decades. Dave Ramsey famously cites a 12% average annual return based on the historical long-term performance of the S&P 500, though some investors prefer to use a more conservative 8% to 10% for planning.

How to Use This Calculator

  • Current Age: Your age today as you begin or continue your investing journey.
  • Retirement Age: The age at which you plan to stop working and begin drawing from your investments.
  • Starting Balance: Any money you currently have in 401(k)s, IRAs, or brokerage accounts.
  • Monthly Contribution: The amount you plan to invest every month (ideally 15% of your income).
  • Expected Return: The annual growth rate. Ramsey advocates for 12%, but you can adjust this to see different scenarios.

A Realistic Example

Imagine a 25-year-old individual who currently has $0 in savings but decides to follow the Ramsey plan. They invest $500 per month into growth stock mutual funds. Assuming a 12% annual return, by the time they reach age 65, their nest egg would grow to approximately $5.8 million. Of that total, only $240,000 was actually contributed by the individual; the remaining $5.5+ million is pure interest growth.

The Ramsey Baby Steps Context

Before you start the heavy investing shown in this calculator, Ramsey recommends completing Step 1 (Starter Emergency Fund), Step 2 (Debt Snowball), and Step 3 (Full Emergency Fund). Once debt-free except for the mortgage, you move to Step 4: Investing 15% for retirement.

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