At age , your total retirement fund is projected to be:
In today's purchasing power (inflation-adjusted):
Estimated monthly retirement income (using 4% rule):
How to Calculate Your Retirement Needs
Planning for retirement is a mathematical journey that balances time, consistent saving, and the power of compound interest. To understand your financial future, you must look beyond your current balance and consider how your investments will grow relative to the rising cost of living.
Key Factors in Retirement Success
The Time Horizon: The number of years between your current age and your target retirement age is the most critical variable. The longer your money stays invested, the more "heavy lifting" compound interest does for you.
Expected Annual Return: Historically, the stock market has returned about 7-10% annually. However, many planners use a conservative 5% or 6% to account for market volatility and a shift toward safer, lower-yield assets as they age.
Inflation Protection: A million dollars today will not buy the same amount of goods 30 years from now. By factoring in an inflation rate (usually 2-3%), you can estimate what your future nest egg is actually worth in "today's dollars."
Practical Example
Imagine a 35-year-old with $50,000 in savings. If they contribute $1,000 every month and earn an 8% annual return, by age 65 they would have approximately $1.98 million. However, if inflation averages 3%, that $1.98 million would only have the purchasing power of about $815,000 in today's money. This highlights why consistent increases in contributions are vital.
The 4% Rule Explained
Once you reach your target nest egg, how much can you safely spend? Many financial advisors point to the "4% Rule." This suggests that if you withdraw 4% of your total balance in the first year of retirement (and adjust for inflation thereafter), your money has a high probability of lasting 30 years or more. Our calculator uses this metric to estimate your potential monthly income.
function calculateRetirement() {
var currentAge = parseFloat(document.getElementById('currentAge').value);
var retirementAge = parseFloat(document.getElementById('retirementAge').value);
var currentSavings = parseFloat(document.getElementById('currentSavings').value);
var monthlyContribution = parseFloat(document.getElementById('monthlyContribution').value);
var annualReturn = parseFloat(document.getElementById('annualReturn').value) / 100;
var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100;
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(monthlyContribution) || isNaN(annualReturn)) {
alert("Please enter valid numerical values.");
return;
}
if (retirementAge 0) {
fvContributions = monthlyContribution * (Math.pow((1 + monthlyReturn), monthsToGrow) – 1) / monthlyReturn;
} else {
fvContributions = monthlyContribution * monthsToGrow;
}
var totalNestEgg = fvCurrentSavings + fvContributions;
// Inflation Adjusted Value: PV = FV / (1 + i)^n
var inflationAdjustedValue = totalNestEgg / Math.pow((1 + inflationRate), yearsToGrow);
// 4% Rule Monthly Income
var annualWithdrawal = totalNestEgg * 0.04;
var monthlyRetirementIncome = annualWithdrawal / 12;
// Formatting
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
});
document.getElementById('resAge').innerText = retirementAge;
document.getElementById('resTotal').innerText = formatter.format(totalNestEgg);
document.getElementById('resInflationAdjusted').innerText = formatter.format(inflationAdjustedValue);
document.getElementById('resMonthlyIncome').innerText = formatter.format(monthlyRetirementIncome) + " / month";
document.getElementById('retirementResult').style.display = 'block';
// Smooth scroll to result
document.getElementById('retirementResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}