Investment and Retirement Calculator

by

Retirement Savings & Longevity Calculator

Your Retirement Outlook:

Years until retirement: —

Estimated savings at retirement: —

Desired annual income at retirement (future dollars): —

Your savings could last approximately: —

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 preRetirementGrowthRate = parseFloat(document.getElementById("preRetirementGrowthRate").value) / 100; var inflationRate = parseFloat(document.getElementById("inflationRate").value) / 100; var desiredAnnualIncomeToday = parseFloat(document.getElementById("desiredAnnualIncomeToday").value); var postRetirementGrowthRate = parseFloat(document.getElementById("postRetirementGrowthRate").value) / 100; // Input validation if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(monthlyContribution) || isNaN(preRetirementGrowthRate) || isNaN(inflationRate) || isNaN(desiredAnnualIncomeToday) || isNaN(postRetirementGrowthRate) || currentAge < 0 || retirementAge < 0 || currentSavings < 0 || monthlyContribution < 0 || preRetirementGrowthRate < 0 || inflationRate < 0 || desiredAnnualIncomeToday < 0 || postRetirementGrowthRate < 0) { document.getElementById("retirementResult").innerHTML = "

Error: Please enter valid positive numbers for all fields.

"; return; } if (retirementAge <= currentAge) { document.getElementById("retirementResult").innerHTML = "

Error: Retirement age must be greater than current age.

"; return; } var yearsToRetirement = retirementAge – currentAge; // 1. Future Value of Current Savings var fvCurrentSavings = currentSavings * Math.pow(1 + preRetirementGrowthRate, yearsToRetirement); // 2. Future Value of Monthly Contributions (Annuity Future Value) var fvContributions = 0; var numberOfMonths = yearsToRetirement * 12; if (preRetirementGrowthRate > 0) { var monthlyRate = Math.pow(1 + preRetirementGrowthRate, 1/12) – 1; // Effective monthly rate fvContributions = monthlyContribution * ((Math.pow(1 + monthlyRate, numberOfMonths) – 1) / monthlyRate); } else { // If growth rate is 0, it's just sum of contributions fvContributions = monthlyContribution * numberOfMonths; } // 3. Total Savings at Retirement (Nominal Value) var totalSavingsAtRetirement = fvCurrentSavings + fvContributions; // 4. Desired Annual Retirement Income (Adjusted for Inflation at Retirement Age) var desiredAnnualIncomeAtRetirement = desiredAnnualIncomeToday * Math.pow(1 + inflationRate, yearsToRetirement); // 5. Calculate How Long Savings Will Last in Retirement var retirementYears = 0; var remainingSavings = totalSavingsAtRetirement; var currentAnnualWithdrawal = desiredAnnualIncomeAtRetirement; var maxRetirementYears = 100; // Prevent infinite loops, reasonable max lifespan if (desiredAnnualIncomeAtRetirement 0) { retirementYears = "Indefinitely (no withdrawals)"; } else if (remainingSavings 0) { retirementYears = 0; } else { while (remainingSavings > 0 && retirementYears 0) { remainingSavings *= (1 + postRetirementGrowthRate); } currentAnnualWithdrawal *= (1 + inflationRate); // Withdrawal amount increases with inflation each year } if (retirementYears >= maxRetirementYears && remainingSavings > 0) { retirementYears = "100+ years (likely indefinitely)"; } else if (remainingSavings 0) { // If savings went negative in the last step, it means it lasted for retirementYears – 1 years and depleted in the current year. // We want to show the full year if it lasted through it. // If remainingSavings is negative, it means it didn't last the full year. // Let's refine: if remainingSavings is negative, it means it ran out *during* this year. // So, it lasted retirementYears – 1 full years, plus a fraction of the current year. // For simplicity, we'll just show the full year count. // If it ran out in year 1, retirementYears will be 1. // If it ran out in year 0 (not enough for first withdrawal), retirementYears will be 0. if (retirementYears === 0 && totalSavingsAtRetirement < desiredAnnualIncomeAtRetirement) { retirementYears = 0; // Not enough for even the first year's withdrawal } else if (remainingSavings < 0) { // It ran out during the current retirementYears. So it lasted retirementYears – 1 full years. // For display, we can round down or show the exact year it ran out. // Let's stick to the full year count for simplicity. // If it ran out in year X, it means it lasted X-1 full years. // If remainingSavings is negative, it means it didn't last the full 'retirementYears'. // So, it lasted 'retirementYears – 1' full years. retirementYears = retirementYears – 1; if (retirementYears < 0) retirementYears = 0; // Handle case where it didn't even last 1 year } } } // Display Results document.getElementById("resultYearsToRetirement").innerHTML = "Years until retirement: " + yearsToRetirement + " years"; document.getElementById("resultTotalSavings").innerHTML = "Estimated savings at retirement: " + totalSavingsAtRetirement.toLocaleString('en-US', { style: 'currency', currency: 'USD' }) + ""; document.getElementById("resultDesiredIncome").innerHTML = "Desired annual income at retirement (future dollars): " + desiredAnnualIncomeAtRetirement.toLocaleString('en-US', { style: 'currency', currency: 'USD' }) + ""; document.getElementById("resultLongevity").innerHTML = "Your savings could last approximately: " + retirementYears + " years"; }

Understanding Your Retirement Savings & Longevity

Planning for retirement is one of the most crucial financial goals. This calculator helps you estimate how much you might accumulate by your desired retirement age and, importantly, how long those savings could sustain your lifestyle once you stop working. It takes into account various factors like your current savings, ongoing contributions, investment growth, and the ever-present impact of inflation.

How the Calculator Works:

Our Retirement Savings & Longevity Calculator uses a multi-step approach to provide a comprehensive outlook:

  1. Years to Retirement: First, it determines the number of years you have left to save based on your current age and desired retirement age. This sets the timeline for your accumulation phase.
  2. Future Value of Current Savings: Your existing investments are projected forward to your retirement age, assuming a specified annual investment growth rate. This shows how much your current nest egg could grow over time.
  3. Future Value of Monthly Contributions: This is a critical component. It calculates the future value of all your regular monthly contributions, compounded at your pre-retirement growth rate, until your retirement date. This demonstrates the power of consistent saving.
  4. Total Savings at Retirement: The sum of your projected current savings and future contributions gives you an estimated total investment portfolio value at the point you retire. This figure is in future (nominal) dollars.
  5. Desired Annual Retirement Income (Inflation-Adjusted): Your desired annual income in today's dollars is adjusted for inflation up to your retirement age. This provides a realistic estimate of how much income you'll need in future dollars to maintain your current purchasing power.
  6. Longevity of Savings: This is where the calculator helps you understand the sustainability of your retirement fund. It simulates year-by-year withdrawals from your total retirement savings. Each year, the withdrawal amount increases with inflation, and the remaining savings continue to grow at your specified post-retirement investment growth rate. The calculator determines approximately how many years your savings could last under these conditions.

Key Factors to Consider:

  • Investment Growth Rate: This is a crucial assumption. Higher growth rates lead to greater accumulation, but also carry higher risk. It's often wise to use a conservative estimate. The calculator allows for different growth rates pre- and post-retirement, acknowledging that investment strategies may change.
  • Inflation: Inflation erodes purchasing power over time. What $60,000 buys today will require more dollars in the future. This calculator accounts for inflation to give you a more realistic picture of your future income needs.
  • Monthly Contributions: Even small, consistent contributions can make a significant difference over decades due to compounding.
  • Desired Retirement Income: Be realistic about your post-retirement spending. Many people aim for 70-80% of their pre-retirement income, but this can vary greatly based on individual circumstances.

Example Scenario:

Let's consider a hypothetical individual:

  • Current Age: 30 years
  • Desired Retirement Age: 65 years
  • Current Investment Savings: $50,000
  • Monthly Investment Contribution: $500
  • Annual Investment Growth Rate (Pre-Retirement): 7%
  • Annual Inflation Rate: 3%
  • Desired Annual Retirement Income (Today's $): $60,000
  • Annual Investment Growth Rate (During Retirement): 5%

Using these inputs, the calculator would show:

  • Years until retirement: 35 years
  • Estimated savings at retirement: Approximately $1,300,000 (this is a rough estimate, actual calculation will be precise)
  • Desired annual income at retirement (future dollars): Approximately $168,000 (due to inflation)
  • Your savings could last approximately: 20-25 years (this will depend on the exact numbers and compounding)

This example highlights how inflation significantly increases the nominal income needed in retirement and how a substantial nest egg is required to sustain withdrawals over many years, even with continued investment growth during retirement.

Use this calculator as a starting point for your retirement planning. It's a powerful tool to visualize the impact of your financial decisions and adjust your savings strategy to achieve your retirement dreams.

Leave a Comment