Retirement calculator
Estimate savings at retirement, the nest egg needed for your income goal, any projected gap and the monthly contribution required.
How the retirement calculator works
The tool makes two projections. First, it grows current savings and end-of-month contributions until retirement using the return entered. Second, it estimates the balance required to fund the portion of retirement spending not covered by other income.
Desired spending and other income are entered in today’s dollars. Their difference is increased by the inflation assumption to the first retirement year. The retirement balance is then the present value, at retirement, of monthly withdrawals through the final planned age. The return during retirement is entered as a real return after inflation, allowing the spending target to retain purchasing power.
Key formulas
The future value of current savings is PV × (1 + r)n. End-of-month contributions use the ordinary-annuity future-value factor:
FV contributions = C × ((1 + r)n − 1) ÷ r
The estimated nest egg uses the present value of monthly retirement withdrawals:
Nest egg = W × (1 − (1 + q)−m) ÷ q
Here, r is the monthly pre-retirement return, n is months until retirement, C is the monthly contribution, W is the monthly income gap at retirement, q is the monthly real return in retirement and m is planned retirement months.
Example using the default assumptions
A 40-year-old planning to retire at 67 enters $100,000 already saved, $500 monthly contributions and a 7% annual return. Desired spending is $5,000 per month in today’s dollars, with $2,000 expected from other monthly income. Inflation is 2.5%, retirement is modeled through age 90 and the real return during retirement is 3%. The calculator compares projected savings with the estimated nest egg and solves the contribution needed under those assumptions.
Important limitations
- Returns and inflation are assumed constant; actual markets and purchasing power vary.
- Taxes, investment fees, contribution limits, employer matching and required distributions are not included.
- Other retirement income is not verified or guaranteed and should be entered conservatively.
- The final planned age is a scenario input, not a life-expectancy prediction.
- The result is an educational projection, not personalized investment, tax or pension advice.
Frequently asked questions
Why is retirement spending entered in today’s dollars?
Today’s dollars are easier to relate to a current budget. The calculator applies the selected inflation rate to estimate the equivalent amount when retirement begins.
What does real return during retirement mean?
It is the assumed investment return after inflation. For example, a 5.5% nominal return with 2.5% inflation is approximately a 2.9% real return.
Does the required contribution include current savings?
Yes. Current savings are grown to retirement first. The required monthly contribution covers only the remaining estimated shortfall.
Can this replace a 401(k) or pension calculator?
No. It can model general savings and other retirement income, but it does not apply plan-specific tax rules, employer matches, benefit formulas or legal limits.