Bankrate Retirement Calculator

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Expertly Reviewed by David Chen, CFA | Published on

Plan your future with confidence. This bankrate retirement calculator helps you estimate the size of your retirement nest egg based on your current savings, ongoing contributions, and expected market returns.

Bankrate Retirement Calculator

Estimated Retirement Balance:
$0.00

Bankrate Retirement Calculator Formula:

FV = PV × (1 + r)^n + PMT × [((1 + r)^n – 1) / r]

Source: Investopedia Future Value Guide | Wikipedia Financial Math

Variables:

  • PV (Present Value): Your current retirement savings balance.
  • PMT (Payment): The fixed amount you contribute monthly.
  • r (Periodic Interest Rate): The annual expected return divided by 12 months.
  • n (Number of Periods): Total months between your current age and retirement age.

Related Calculators:

What is Bankrate Retirement Calculator?

A bankrate retirement calculator is a specialized financial planning tool designed to project how much money you will have accumulated by the time you stop working. By considering factors like compound interest and regular monthly investments, it provides a mathematical roadmap for your long-term goals.

The primary purpose is to identify “gaps” in your savings plan. If the projected balance isn’t enough to sustain your lifestyle, you can adjust variables like your retirement age or monthly contribution to see how small changes today impact your wealth decades later.

How to Calculate Bankrate Retirement Calculator (Example):

  1. Determine your investment horizon: If you are 30 and retiring at 65, your horizon is 35 years (420 months).
  2. Convert your annual return to monthly: A 6% annual return is 0.5% (0.005) monthly.
  3. Apply the compound interest formula to your starting balance.
  4. Apply the annuity formula to your monthly contributions.
  5. Add both results together to find your final “Future Value”.

Frequently Asked Questions (FAQ):

How much should I aim to save for retirement?

Most experts suggest aiming for 10-12 times your final annual salary or following the “4% rule” for withdrawals.

Does this calculator account for inflation?

This basic version uses nominal dollars. To account for inflation, subtract the expected inflation rate from your return rate.

Why is compound interest so important?

Compound interest allows you to earn interest on your interest, causing your balance to grow exponentially over time.

What is a realistic expected return?

The S&P 500 has historically returned about 10% annually, but many conservative planners use 6% or 7% to be safe.

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