The Wealth by Age Calculator is a powerful tool designed to give you an estimate of your future financial standing based on your current net worth, ongoing savings, and an assumed rate of growth. It helps individuals visualize their financial trajectory and understand the potential impact of consistent saving and investing over time.
How the Calculation Works
The calculator uses a compound growth formula to project your net worth. The core idea is that your money, and the money you add to it, grows over time. The formula used is a variation of the future value of an annuity combined with compound interest for the initial net worth.
Let:
NW0 = Current Net Worth
S = Annual Savings
r = Assumed Annual Net Worth Growth Rate (as a decimal, e.g., 7% = 0.07)
n = Number of years until target age (Target Age – Current Age)
The projected net worth (NWn) at the target age is calculated iteratively or can be approximated by:
Future Value of Current Net Worth: NW0 * (1 + r)n Future Value of Annual Savings (Annuity): S * [((1 + r)n – 1) / r]
*Note: This formula assumes savings are added at the end of each year and grow at the assumed rate. For simplicity, the calculator uses a direct compound growth approach for total funds annually.*
Why Use This Calculator?
Financial Planning: It provides a benchmark for your retirement savings or other long-term financial goals.
Motivation: Seeing a projected positive future can be a strong motivator to maintain or increase savings habits.
Goal Setting: It helps in setting realistic financial targets and understanding what level of savings or growth is needed to achieve them.
Impact of Variables: You can experiment with different savings rates or growth assumptions to see how they affect your future wealth.
Important Considerations:
Assumptions: The accuracy of the projection heavily relies on the assumed annual growth rate and consistent savings. Market performance can vary significantly.
Inflation: This calculator does not explicitly account for inflation, which erodes purchasing power over time. Real returns might be lower.
Taxes and Fees: Investment gains are often subject to taxes, and investment vehicles may have fees, which are not factored into this basic projection.
Life Events: Unexpected expenses or income changes (e.g., job loss, medical emergencies, inheritance) are not included.
Use this calculator as a guide and a starting point for more detailed financial planning with a professional advisor.
function calculateWealth() {
var currentAge = parseFloat(document.getElementById("currentAge").value);
var currentNetWorth = parseFloat(document.getElementById("currentNetWorth").value);
var annualSavings = parseFloat(document.getElementById("annualSavings").value);
var assumedAnnualGrowthRate = parseFloat(document.getElementById("assumedAnnualGrowthRate").value);
var targetAge = parseFloat(document.getElementById("targetAge").value);
var resultDiv = document.getElementById("result");
var resultTargetAgeSpan = resultDiv.getElementsByTagName("span")[0];
var resultNetWorthSpan = resultDiv.getElementsByTagName("span")[1];
// Validate inputs
if (isNaN(currentAge) || isNaN(currentNetWorth) || isNaN(annualSavings) || isNaN(assumedAnnualGrowthRate) || isNaN(targetAge)) {
resultDiv.innerHTML = 'Please enter valid numbers for all fields.';
return;
}
if (currentAge < 0 || currentNetWorth < 0 || annualSavings < 0 || targetAge < 0) {
resultDiv.innerHTML = 'Please enter non-negative values for age, net worth, savings, and target age.';
return;
}
if (targetAge <= currentAge) {
resultDiv.innerHTML = 'Target age must be greater than the current age.';
return;
}
if (assumedAnnualGrowthRate < 0) {
resultDiv.innerHTML = 'Assumed annual growth rate cannot be negative.';
return;
}
var yearsToProject = targetAge – currentAge;
var growthRateDecimal = assumedAnnualGrowthRate / 100;
var projectedNetWorth = currentNetWorth;
var totalSavingsAdded = 0;
// Simplified projection: assumes savings are added at end of year and grow along with existing principal
for (var i = 0; i < yearsToProject; i++) {
projectedNetWorth += annualSavings; // Add savings for the year
projectedNetWorth *= (1 + growthRateDecimal); // Apply growth rate
totalSavingsAdded += annualSavings;
}
// Format numbers for better readability (e.g., with commas, two decimal places)
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD', // Default to USD, user should interpret based on their input currency
minimumFractionDigits: 2,
maximumFractionDigits: 2,
});
resultTargetAgeSpan.textContent = targetAge;
resultNetWorthSpan.textContent = formatter.format(projectedNetWorth);
}