Planning for retirement is one of the most critical financial tasks you will ever undertake. The goal is to accumulate a "nest egg" that generates enough income to maintain your lifestyle once your primary salary stops. This calculator helps you project your future wealth by accounting for current savings, ongoing contributions, and the power of compound interest.
Understanding the Core Variables
To get an accurate picture of your financial future, you must consider several factors:
Current Age vs. Retirement Age: This determines your "time horizon." The more time you have, the more you can benefit from compounding.
Annual Growth Rate: This is the average yearly return you expect from your investments (stocks, bonds, real estate). Historically, the S&P 500 has averaged around 7-10% before inflation.
Inflation Rate: Inflation erodes purchasing power. A million dollars today will not buy the same amount of goods 30 years from now. This calculator provides a "Real Value" adjustment to show what your future savings would be worth in today's dollars.
The Math Behind the Growth
The calculation uses the Future Value of an Annuity formula combined with the Future Value of a Lump Sum. The formula for the monthly contributions is:
FV = P * [(1 + r)^n – 1] / r
Where P is the monthly contribution, r is the monthly interest rate, and n is the total number of months.
Realistic Example
Imagine Sarah, a 30-year-old marketing manager. She currently has $25,000 in her 401(k). She plans to retire at 65. She contributes $800 every month and expects an average annual return of 7%. She also factors in 2.5% inflation.
By age 65, Sarah's nominal balance would grow to approximately $1,564,000. However, when adjusted for inflation, that amount would have the purchasing power of roughly $661,000 in today's money. This realization helps Sarah decide if she needs to increase her monthly contributions to meet her lifestyle goals.
function calculateRetirement() {
var curAge = parseFloat(document.getElementById('currentAge').value);
var retAge = parseFloat(document.getElementById('retirementAge').value);
var startBal = parseFloat(document.getElementById('startingBalance').value) || 0;
var monthlyIn = parseFloat(document.getElementById('monthlyDeposit').value) || 0;
var annualReturn = parseFloat(document.getElementById('expectedReturn').value) || 0;
var inflation = parseFloat(document.getElementById('inflationRate').value) || 0;
if (isNaN(curAge) || isNaN(retAge) || curAge >= retAge) {
alert("Please enter valid ages. Retirement age must be greater than current age.");
return;
}
var yearsToRetire = retAge – curAge;
var months = yearsToRetire * 12;
var monthlyRate = (annualReturn / 100) / 12;
var monthlyInflation = (inflation / 100) / 12;
// Calculation for Future Value of Starting Balance
var fvStarting = startBal * Math.pow((1 + monthlyRate), months);
// Calculation for Future Value of Monthly Contributions
var fvContributions = 0;
if (monthlyRate > 0) {
fvContributions = monthlyIn * (Math.pow((1 + monthlyRate), months) – 1) / monthlyRate;
} else {
fvContributions = monthlyIn * months;
}
var totalNominal = fvStarting + fvContributions;
// Adjust for Inflation (Real Value)
// Formula: PV = FV / (1 + i)^n
var totalReal = totalNominal / Math.pow((1 + (inflation / 100)), yearsToRetire);
// Format results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById('totalNominal').innerText = formatter.format(totalNominal);
document.getElementById('totalReal').innerText = formatter.format(totalReal);
var totalInvested = startBal + (monthlyIn * months);
var interestEarned = totalNominal – totalInvested;
document.getElementById('retirementSummaryText').innerHTML =
"In " + yearsToRetire + " years, your account is projected to reach " + formatter.format(totalNominal) + ". " +
"Throughout this period, you will have contributed a total of " + formatter.format(totalInvested) +
", while the remaining " + formatter.format(interestEarned) + " is the result of compound growth.";
document.getElementById('retirementResult').style.display = 'block';
document.getElementById('retirementResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}