Planning for retirement is one of the most crucial financial steps you can take. This calculator helps you estimate how much income your current savings and future contributions might generate in retirement, and whether you're on track to meet your desired annual income goal. It takes into account your current savings, how much you plan to save annually, expected investment returns, inflation, and your desired lifestyle in retirement.
How It Works
The calculator projects the growth of your current savings and future contributions up to your target retirement age, considering your expected investment returns. It then estimates the total nest egg you'll have. Simultaneously, it calculates the total amount of money you'll need at retirement to provide your desired annual income, adjusted for inflation, throughout your expected retirement years. Finally, it compares your projected savings with your required nest egg and shows you the sustainable annual income your savings could provide in today's dollars.
Understanding the Inputs
Current Age: Your age today in years.
Target Retirement Age: The age at which you plan to stop working and retire.
Current Retirement Savings ($): The total amount of money you currently have saved specifically for retirement (e.g., in 401k, IRA, personal investment accounts).
Annual Savings Contribution ($): The amount you plan to save and invest each year until retirement.
Expected Annual Investment Return (Pre-Retirement, %): The average annual percentage return you expect your investments to earn before you retire. This is typically higher than during retirement as you might take on more risk.
Expected Annual Investment Return (During Retirement, %): The average annual percentage return you expect your investments to earn while you are retired and drawing income. This is often more conservative.
Desired Annual Retirement Income (Today's $, $): The amount of income you would like to have each year in retirement, expressed in today's purchasing power.
Expected Annual Inflation Rate (%): The average annual rate at which you expect the cost of living to increase. This is crucial for adjusting your desired income to future dollars.
Expected Years in Retirement: The number of years you anticipate being retired (e.g., if you retire at 65 and expect to live until 90, this would be 25 years).
Example Scenario
Let's consider a 30-year-old individual planning for retirement:
Desired Annual Retirement Income (Today's $): $60,000
Expected Annual Inflation Rate: 3%
Expected Years in Retirement: 25 (from age 65 to 90)
Using these inputs, the calculator would project their total savings at retirement, the required nest egg to achieve their desired income, and the actual sustainable income their savings could provide. This helps them understand if they need to save more, adjust their retirement age, or modify their income expectations.
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function calculateRetirementIncome() {
// Get input values
var currentAge = parseFloat(document.getElementById('currentAge').value);
var retirementAge = parseFloat(document.getElementById('retirementAge').value);
var currentSavings = parseFloat(document.getElementById('currentSavings').value);
var annualContribution = parseFloat(document.getElementById('annualContribution').value);
var preRetirementReturn = parseFloat(document.getElementById('preRetirementReturn').value) / 100;
var postRetirementReturn = parseFloat(document.getElementById('postRetirementReturn').value) / 100;
var desiredAnnualIncome = parseFloat(document.getElementById('desiredAnnualIncome').value);
var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100;
var yearsInRetirement = parseFloat(document.getElementById('yearsInRetirement').value);
var resultDiv = document.getElementById('retirementResult');
resultDiv.innerHTML = "; // Clear previous results
// Validate inputs
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(annualContribution) ||
isNaN(preRetirementReturn) || isNaN(postRetirementReturn) || isNaN(desiredAnnualIncome) ||
isNaN(inflationRate) || isNaN(yearsInRetirement)) {
resultDiv.innerHTML = 'Please enter valid numbers for all fields.';
return;
}
if (currentAge >= retirementAge) {
resultDiv.innerHTML = 'Current Age must be less than Target Retirement Age for future planning.';
return;
}
if (yearsInRetirement = 0) {
statusClass = 'result-success';
statusMessage = 'Congratulations! Based on your inputs, you are on track to meet or exceed your desired retirement income goal.';
} else {
statusClass = 'result-danger';
statusMessage = 'Warning: Based on your inputs, your projected savings may not be enough to meet your desired retirement income goal.';
}
resultDiv.innerHTML =
'Projected Total Savings at Retirement: $' + totalSavingsAtRetirement.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'Required Nest Egg for Desired Income: $' + requiredNestEgg.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'Difference (Surplus/Deficit):= 0 ? 'result-success' : 'result-danger') + '">$' + difference.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + '' +
'Estimated Sustainable Annual Income (in today\'s dollars): $' + sustainableIncomeToday.toLocaleString(undefined, { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
" + statusMessage + ";
}