Planning for retirement is one of the most significant financial journeys you will undertake. This tool uses the power of compound interest to estimate how much your portfolio will be worth when you decide to stop working. By inputting your current balance, monthly contributions, and expected rates of return, you can visualize your financial trajectory.
Understanding the Inputs
Current Savings: The total amount of money you already have invested in 401(k)s, IRAs, or brokerage accounts.
Monthly Contribution: The amount you plan to add to your investments every month until you retire.
Expected Annual Return: The average yearly growth of your investments. Historically, the S&P 500 has averaged around 7-10% before inflation.
Inflation Rate: This is crucial. $1 million today will not buy the same amount of goods in 30 years. This calculator helps adjust your results to "today's dollars."
Example Calculation
Suppose you are 30 years old with $10,000 saved. You contribute $500 per month and expect a 7% return. By the age of 65 (35 years of growth), your total nominal balance would grow to approximately $934,000. However, if you account for a 2.5% inflation rate, that buying power is roughly equivalent to $390,000 in today's currency.
Tips to Maximize Your Savings
1. Start Early: Because of compounding, money invested in your 20s is worth significantly more than money invested in your 40s.
2. Increase Contributions: Even a small $50 increase in monthly savings can result in tens of thousands of extra dollars over several decades.
3. Minimize Fees: High expense ratios in mutual funds can eat away at your annual returns. Look for low-cost index funds.
function calculateRetirement() {
var currentSavings = parseFloat(document.getElementById('currentSavings').value);
var monthlyContribution = parseFloat(document.getElementById('monthlyContribution').value);
var currentAge = parseInt(document.getElementById('currentAge').value);
var retirementAge = parseInt(document.getElementById('retirementAge').value);
var annualReturn = parseFloat(document.getElementById('annualReturn').value) / 100;
var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100;
if (isNaN(currentSavings) || isNaN(monthlyContribution) || isNaN(currentAge) || isNaN(retirementAge) || isNaN(annualReturn)) {
alert("Please enter valid numeric values in all fields.");
return;
}
if (retirementAge 0) {
fvSeries = monthlyContribution * ((Math.pow((1 + monthlyRate), monthsToInvest) – 1) / monthlyRate);
} else {
fvSeries = monthlyContribution * monthsToInvest;
}
var totalNominal = fvPrincipal + fvSeries;
// Adjust for Inflation: FV / (1 + inflation)^years
var inflationAdjusted = totalNominal / Math.pow((1 + inflationRate), yearsToInvest);
// Format results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
});
document.getElementById('resAge').innerText = retirementAge;
document.getElementById('resTotal').innerText = formatter.format(totalNominal);
document.getElementById('inflation-note').innerText = "Adjusted for inflation (" + (inflationRate * 100).toFixed(1) + "%), this has the buying power of " + formatter.format(inflationAdjusted) + " in today's dollars.";
document.getElementById('retirement-result').style.display = 'block';
}