Your projected retirement savings will appear here.
Understanding Your Retirement Savings Projection
This calculator helps you estimate your potential retirement nest egg based on your current savings,
how much you plan to save annually, your expected investment growth rate, and your target retirement age.
Planning for retirement early is crucial, and this tool provides a valuable insight into what your future savings might look like.
How the Calculation Works
The projection is based on a compound interest formula, taking into account your initial savings,
regular contributions, and the growth of your investments over time. The core idea is that your
money earns returns, and then those returns also start earning returns, accelerating your savings growth.
The formula used is a future value of an annuity calculation combined with the future value of a lump sum.
For each year until retirement, the calculator projects:
The growth of your existing balance based on the expected annual return.
The addition of your annual contribution.
Specifically, for each year:
New Balance = (Previous Balance * (1 + Annual Return Rate)) + Annual Contribution
The Expected Annual Return is a critical factor. It represents the average yearly percentage gain you anticipate from your investments (e.g., stocks, bonds, mutual funds). It's important to note that investment returns are not guaranteed and can fluctuate significantly year by year. This figure should be a realistic, long-term average.
The Annual Contribution is the amount you plan to add to your retirement savings each year. This could include contributions to 401(k)s, IRAs, or other retirement accounts.
The calculator provides a simplified projection. Factors not included but important for real-world planning include:
Inflation: The purchasing power of money decreases over time.
Taxes: Investment gains and withdrawals may be taxed.
Changes in income or contribution amounts over time.
Unexpected expenses or market downturns.
When to Use This Calculator
Early Planning: To see the power of starting early and saving consistently.
Contribution Adjustments: To understand how increasing your annual savings impacts your final goal.
Retirement Age Scenarios: To compare the outcomes of retiring at different ages.
Investment Strategy Assessment: To get a rough idea of the potential impact of different average annual return rates.
Use this calculator as a guide to visualize your retirement savings journey and motivate you to take consistent steps towards your financial future.
function calculateRetirementSavings() {
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 expectedAnnualReturn = parseFloat(document.getElementById("expectedAnnualReturn").value) / 100; // Convert percentage to decimal
var resultDiv = document.getElementById("result");
// Input validation
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(annualContribution) || isNaN(expectedAnnualReturn)) {
resultDiv.innerText = "Please enter valid numbers for all fields.";
resultDiv.style.backgroundColor = "#f8d7da"; // Error color
resultDiv.style.color = "#721c24";
return;
}
if (retirementAge <= currentAge) {
resultDiv.innerText = "Retirement age must be greater than current age.";
resultDiv.style.backgroundColor = "#f8d7da"; // Error color
resultDiv.style.color = "#721c24";
return;
}
if (currentAge < 0 || retirementAge < 0 || currentSavings < 0 || annualContribution < 0) {
resultDiv.innerText = "Savings and contributions cannot be negative.";
resultDiv.style.backgroundColor = "#f8d7da"; // Error color
resultDiv.style.color = "#721c24";
return;
}
var yearsToRetirement = retirementAge – currentAge;
var projectedSavings = currentSavings;
for (var i = 0; i < yearsToRetirement; i++) {
projectedSavings = projectedSavings * (1 + expectedAnnualReturn) + annualContribution;
}
// Format the result to two decimal places and add dollar sign
var formattedSavings = projectedSavings.toLocaleString(undefined, {
minimumFractionDigits: 0,
maximumFractionDigits: 0
});
resultDiv.innerText = "Projected Retirement Savings: $" + formattedSavings;
resultDiv.style.backgroundColor = getComputedStyle(document.documentElement).getPropertyValue('–success-green'); // Reset to success color
resultDiv.style.color = "white";
}