Plan for your future with our Retirement Savings Goal Calculator, designed to help you estimate the nest egg you'll need and the monthly savings required to achieve your retirement dreams. Edward Jones financial advisors often help clients set and reach these types of long-term financial goals.
Understanding Your Retirement Savings Goal
Retirement planning is a cornerstone of financial well-being, and understanding how much you need to save is the first critical step. This Edward Jones Retirement Savings Goal Calculator helps you visualize your financial future by estimating the total nest egg required to support your desired lifestyle in retirement, and the monthly contributions needed to get there.
Key Factors in Retirement Planning:
Current Age and Desired Retirement Age: These determine your savings horizon. The longer you have, the more time your investments have to grow, thanks to the power of compounding.
Current Retirement Savings: This is your starting point. Any existing savings give you a head start towards your goal.
Desired Annual Retirement Income: This is perhaps the most personal input. It reflects the lifestyle you envision in retirement. Consider your current expenses, potential future healthcare costs, travel plans, and hobbies. Remember, this calculator adjusts this amount for inflation to give you a realistic future value.
Expected Annual Inflation Rate: Inflation erodes purchasing power over time. What $70,000 buys today will require more dollars in 30 years. This calculator accounts for inflation to ensure your desired income is sufficient in future dollars.
Expected Annual Investment Return: This is the average annual growth you anticipate from your investments. A higher return can significantly reduce the amount you need to personally contribute, but it also comes with higher risk. It's crucial to choose a realistic and sustainable return rate based on your investment strategy.
How the Calculator Works:
Our calculator uses several financial principles to provide its estimates:
Inflation Adjustment: Your desired annual retirement income is first adjusted for inflation from your current age until your desired retirement age. This gives you a more accurate picture of what that income will need to be in future dollars.
Nest Egg Calculation: A common rule of thumb, like the "4% rule," is often used to estimate the total nest egg needed. This rule suggests you can safely withdraw about 4% of your initial retirement portfolio each year, adjusted for inflation, without running out of money over a typical 30-year retirement. So, if you need $100,000 per year, you'd need a nest egg of $2,500,000 ($100,000 / 0.04).
Future Value of Current Savings: Your existing savings are projected forward to your retirement age, assuming they grow at your specified annual investment return.
Required Additional Savings: The difference between your total needed nest egg and the future value of your current savings is the amount you still need to accumulate.
Monthly Savings Contribution: Finally, the calculator determines the monthly amount you would need to save from now until retirement to reach that additional savings goal, again assuming your specified investment return.
Important Considerations:
This calculator provides estimates and should be used as a guide. Actual results may vary based on market performance, changes in inflation, unexpected expenses, and your personal financial decisions. It does not account for taxes on withdrawals, Social Security benefits, pensions, or other income sources you might have in retirement. For personalized advice and a comprehensive financial plan, consulting with a qualified financial advisor, like those at Edward Jones, is highly recommended.
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function calculateRetirementGoal() {
var currentAge = parseFloat(document.getElementById("currentAge").value);
var retirementAge = parseFloat(document.getElementById("retirementAge").value);
var currentSavings = parseFloat(document.getElementById("currentSavings").value);
var desiredAnnualIncome = parseFloat(document.getElementById("desiredAnnualIncome").value);
var inflationRate = parseFloat(document.getElementById("inflationRate").value) / 100;
var investmentReturn = parseFloat(document.getElementById("investmentReturn").value) / 100;
// Validate inputs
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) ||
isNaN(desiredAnnualIncome) || isNaN(inflationRate) || isNaN(investmentReturn) ||
currentAge <= 0 || retirementAge <= 0 || desiredAnnualIncome = retirementAge) {
document.getElementById("result").innerHTML = "Please enter valid numbers for all fields. Current Age must be less than Desired Retirement Age.";
return;
}
var yearsUntilRetirement = retirementAge – currentAge;
var safeWithdrawalRate = 0.04; // Common 4% rule
// 1. Calculate future value of desired annual income (adjusted for inflation)
var futureDesiredAnnualIncome = desiredAnnualIncome * Math.pow((1 + inflationRate), yearsUntilRetirement);
// 2. Calculate total nest egg needed at retirement
var totalNestEggNeeded = futureDesiredAnnualIncome / safeWithdrawalRate;
// 3. Calculate future value of current savings
var futureValueOfCurrentSavings = currentSavings * Math.pow((1 + investmentReturn), yearsUntilRetirement);
// 4. Calculate additional amount needed to save
var amountToSaveFromNow = totalNestEggNeeded – futureValueOfCurrentSavings;
var monthlySavingsRequired = 0;
if (amountToSaveFromNow > 0) {
var monthlyInvestmentReturn = investmentReturn / 12;
var totalMonths = yearsUntilRetirement * 12;
// PMT formula for future value: PMT = (FV * r) / ((1 + r)^n – 1)
if (monthlyInvestmentReturn === 0) { // Handle zero interest rate
monthlySavingsRequired = amountToSaveFromNow / totalMonths;
} else {
monthlySavingsRequired = (amountToSaveFromNow * monthlyInvestmentReturn) / (Math.pow((1 + monthlyInvestmentReturn), totalMonths) – 1);
}
} else {
monthlySavingsRequired = 0; // Already have enough or more
}
var resultHTML = "
Your Retirement Goal Summary:
";
resultHTML += "Years Until Retirement: " + yearsUntilRetirement + "";
resultHTML += "Estimated Desired Annual Income (at retirement, adjusted for inflation): $" + futureDesiredAnnualIncome.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
resultHTML += "Estimated Total Retirement Nest Egg Needed: $" + totalNestEggNeeded.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
resultHTML += "Future Value of Your Current Savings: $" + futureValueOfCurrentSavings.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
if (amountToSaveFromNow <= 0) {
resultHTML += "Congratulations! Based on your inputs, your current savings and expected growth are projected to meet or exceed your retirement goal.";
} else {
resultHTML += "Additional Amount Needed to Save: $" + amountToSaveFromNow.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
resultHTML += "Estimated Monthly Savings Required: $" + monthlySavingsRequired.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + "";
}
document.getElementById("result").innerHTML = resultHTML;
}