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Retirement Calculator

Estimate how much you need to save for retirement.

Finance
Retirement Savings Calculator
Estimate how much you need to save for retirement.

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Plan Your Journey to Financial Independence

Plan for your golden years with our Retirement Calculator. By inputting your current age, desired retirement age, current savings, monthly contributions, and an estimated rate of return, this tool projects your estimated savings at retirement. It provides a clear picture of whether you are on track to meet your retirement goals.

The Retirement Formula Explained

This calculator uses the future value formulas to project the growth of your investments over time. It calculates the future value of your current savings and the future value of your ongoing monthly contributions separately, then adds them together.

  • Future Value of Current Savings: FV = PV * (1 + r/n)^(nt)
  • Future Value of Contributions: FV = PMT * [((1 + r/n)^(nt) - 1) / (r/n)] Where PV is your current savings, PMT is your monthly contribution, r is the annual rate, n is compounding frequency (12), and t is the number of years until retirement.

How to Use the Calculator

  1. Current Age & Retirement Age: Enter your current age and the age you plan to retire.
  2. Current Savings: Input the total amount you have saved for retirement so far.
  3. Monthly Contribution: Enter the amount you save for retirement each month.
  4. Annual Return: Input the estimated annual rate of return you expect on your investments.

Real-World Example

A person is 30 years old and plans to retire at 65. They have $50,000 in retirement savings and contribute $500 per month. They estimate an average annual return of 7%.

  • Years to Grow: 65 - 30 = 35 years
  • After 35 years, their initial $50,000 will grow to approximately $566,770.
  • Their monthly contributions of $500 will grow to approximately $851,700.
  • Total Estimated Savings: $1,418,470

Frequently Asked Questions (FAQ)

  • Does this account for inflation? No, this is a simple projection and does not account for inflation, which will reduce the purchasing power of your savings over time. It shows the future value in today's dollars.
  • What is a realistic rate of return to use? A common estimate for long-term stock market returns is between 7% and 10% annually, but this is not guaranteed. Using a more conservative rate (e.g., 5-6%) can provide a safer estimate.
  • Does this include Social Security or pensions? No, this calculator only projects the growth of your personal savings and investments. Your total retirement income will likely also include Social Security and any pensions you may have.