Estimate how much you'll need to save for a comfortable retirement and how long your savings might last.
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Understanding Your Retirement Readiness
This calculator helps you project your retirement savings based on your current age, savings, contributions, expected investment growth, and desired retirement income. It then estimates how long your savings might last in retirement.
How it Works:
Projected Savings at Retirement:
The calculator first estimates the total value of your retirement savings at your desired retirement age. This is done by compounding your current savings and adding your annual contributions, each growing at your expected annual rate of return. The formula used is a future value of an annuity calculation combined with the future value of a lump sum.
Formula Concept:
Future Value (FV) = PV*(1+r)^n + PMT*[((1+r)^n – 1)/r]
Where:
PV = Present Value (Current Savings)
r = Annual Rate of Return (as a decimal)
n = Number of years until retirement
PMT = Annual Contribution
Income Gap Analysis:
Once projected savings at retirement are calculated, the calculator compares this to your desired annual retirement income. This highlights the potential gap between your needs and your projected resources.
Longevity of Savings:
The calculator then estimates how many years your total projected retirement savings could support your desired annual income, assuming a conservative rate of return during retirement (often assumed to be lower than pre-retirement, though for simplicity, this model uses the same expected return, which can be adjusted). This involves dividing the total retirement nest egg by the desired annual income.
Key Factors to Consider:
Inflation: This calculator does not explicitly account for inflation, which will erode the purchasing power of your savings over time. You may need to adjust your desired income upwards to account for inflation.
Taxes: Retirement income is often taxable. The figures produced are pre-tax.
Investment Risk: Expected annual returns are not guaranteed. Actual returns can vary significantly. It's wise to have a diversified investment strategy.
Healthcare Costs: Healthcare expenses in retirement can be substantial and unpredictable.
Social Security/Pensions: This calculator assumes your desired income is solely from personal savings. Factor in any expected Social Security benefits or pensions to reduce the amount you need to save.
Use this tool as a guide to understand your current trajectory and the impact of changes in your savings habits and investment strategy. Consulting with a financial advisor is recommended for personalized retirement planning.
function calculateRetirement() {
var currentAge = parseFloat(document.getElementById("currentAge").value);
var retirementAge = parseFloat(document.getElementById("retirementAge").value);
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 desiredRetirementIncome = parseFloat(document.getElementById("desiredRetirementIncome").value);
var lifeExpectancy = parseFloat(document.getElementById("lifeExpectancy").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(annualContributions) || isNaN(expectedAnnualReturn) || isNaN(desiredRetirementIncome) || isNaN(lifeExpectancy)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (retirementAge <= currentAge) {
resultDiv.innerHTML = "Retirement age must be greater than current age.";
return;
}
if (lifeExpectancy <= retirementAge) {
resultDiv.innerHTML = "Life expectancy must be greater than retirement age.";
return;
}
if (currentSavings < 0 || annualContributions < 0 || desiredRetirementIncome < 0 || expectedAnnualReturn < 0 || currentAge < 0 || retirementAge < 0 || lifeExpectancy 0) {
fvContributions = annualContributions * (Math.pow(1 + expectedAnnualReturn, yearsUntilRetirement) – 1) / expectedAnnualReturn;
} else {
// If return is 0%, it's just simple addition
fvContributions = annualContributions * yearsUntilRetirement;
}
var totalSavingsAtRetirement = fvCurrentSavings + fvContributions;
// Calculate how many years the savings will last
var yearsSavingsWillLast = 0;
if (desiredRetirementIncome > 0) {
yearsSavingsWillLast = totalSavingsAtRetirement / desiredRetirementIncome;
} else {
yearsSavingsWillLast = Infinity; // If no income needed, savings last forever.
}
// Prepare the output message
var outputHTML = "
Your Retirement Projection
";
outputHTML += "Projected Savings at Retirement Age " + retirementAge + ": " + formatCurrency(totalSavingsAtRetirement) + "";
outputHTML += "Your Savings Could Last For: " + (yearsSavingsWillLast === Infinity ? "An extended period" : Math.floor(yearsSavingsWillLast) + " years") + "";
if (yearsSavingsWillLast < (lifeExpectancy – retirementAge)) {
outputHTML += "Warning: Based on these assumptions, your savings may not last throughout your entire retirement.";
} else {
outputHTML += "Based on these assumptions, your savings appear sufficient to cover your desired income throughout your projected lifespan.";
}
resultDiv.innerHTML = outputHTML;
}
// Helper function to format currency
function formatCurrency(amount) {
return "$" + amount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
// Initial calculation on load (optional)
// window.onload = calculateRetirement;