Retirement Calculator
Project how much your retirement savings will grow and estimate whether you are on track to meet your retirement income goal.
What Is a Retirement Calculator?
A retirement calculator helps you estimate whether your current savings and contribution rate will provide enough income in retirement. It projects the future value of your retirement fund based on your current balance, regular contributions, expected rate of return, and the number of years until you plan to retire. This is one of the most important financial planning tools you can use.
Retirement planning is a long-term game where small decisions today have enormous consequences decades later. Starting to save in your twenties versus your thirties can mean the difference between a comfortable retirement and a stressful one, thanks to compound growth. This calculator shows you exactly how much impact your savings rate, investment returns, and time horizon have on your final retirement balance.
Use this tool to answer key questions: Am I saving enough? What happens if I retire 5 years earlier or later? How does increasing my contribution by an extra 100 per month affect the outcome? By running multiple scenarios, you can build a retirement plan that accounts for different possibilities and gives you confidence that you are on the right track.
How Do You Use This Retirement Calculator?
Enter your current age, target retirement age, current retirement savings, monthly contribution, and expected annual return. Click Calculate to see your projected retirement fund balance, total contributions, and total investment growth.
- Enter your current age and your desired retirement age.
- Input your current retirement savings balance (all retirement accounts combined).
- Set the monthly amount you contribute to retirement savings.
- Enter the expected annual rate of return on your investments.
- Click Calculate to see your projected retirement balance.
- Adjust contributions or retirement age to explore different scenarios.
How Does the Retirement Calculator Formula Work?
The formula used: FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)] where P = current savings, PMT = monthly contribution, r = annual return, n = 12, t = years until retirement
The retirement calculator uses the future value formula for compound growth with regular contributions over the remaining years until your target retirement age.
FV = P(1 + r/n)^(nt) + PMT × [((1 + r/n)^(nt) - 1) / (r/n)]
P is your current retirement savings. PMT is your monthly contribution. r is the expected annual return on your investments. n is the compounding frequency (12 for monthly). t is the number of years until retirement. The formula combines the growth of your existing savings with the accumulated value of all future contributions to project your total retirement balance.
What Are Some Example Calculations?
A 30-year-old with $50,000 saved, contributing $500/month at 7% return, retiring at 65: Projected balance = $1,017,230. Total contributions = $260,000. Growth = $757,230.
Early saver: Age 25, retire at 65, $10,000 current savings, $300/month at 7%
P = 10000, PMT = 300, r = 0.07/12 = 0.005833, t = 40, n = 12. FV = 10000(1.005833)^480 + 300 × [((1.005833)^480 - 1) / 0.005833]
Projected balance = $935,712. Total contributions = $154,000. Growth from returns = $781,712.
Mid-career: Age 40, retire at 67, £80,000 saved, £800/month at 6%
P = 80000, PMT = 800, r = 0.06/12 = 0.005, t = 27, n = 12. FV = 80000(1.005)^324 + 800 × [((1.005)^324 - 1) / 0.005]
Projected balance = £889,422. Total contributions = £339,200. Growth from returns = £550,222.
Late starter: Age 50, retire at 68, €20,000 saved, €1,500/month at 5%
P = 20000, PMT = 1500, r = 0.05/12 = 0.004167, t = 18, n = 12. FV = 20000(1.004167)^216 + 1500 × [((1.004167)^216 - 1) / 0.004167]
Projected balance = €516,574. Total contributions = $344,000. Growth from returns = $172,574.
When Should You Use a Retirement Calculator?
Use this retirement calculator at every major financial milestone: when you start your first job, receive a significant pay rise, change employers, or approach your 40s and 50s. Early in your career, it helps you set an appropriate savings rate. In mid-career, it shows whether you need to increase contributions. As retirement approaches, it helps you decide exactly when you can afford to stop working.
The calculator is also valuable when making decisions about pension contributions. If your employer matches retirement contributions up to a certain percentage, run the numbers with and without the full match to see the impact. Similarly, use it to evaluate whether making additional voluntary contributions to a pension or retirement account is worthwhile given your specific timeline and goals.
What Do These Terms Mean?
What Are the Best Tips to Know?
- Maximise any employer match on pension or retirement account contributions — it is free money with an immediate 100% return.
- Increase your contribution rate by 1% each year, especially when you receive a pay rise, so you barely notice the difference.
- Use a conservative return estimate (5-6%) for projections to avoid unpleasant surprises in retirement.
- Do not forget to account for inflation when thinking about how much you will need — prices will be much higher when you retire.
- Consider running the calculation with different retirement ages to see the enormous impact of even a few extra years of saving and growth.
What Mistakes Should You Avoid?
- Ignoring inflation, which means a projected balance of 1 million today might only have the purchasing power of 500,000 in 30 years.
- Using overly optimistic return rates (10%+) without factoring in fees, taxes, and market downturns.
- Not increasing contributions as income grows, which means falling behind relative to your expected retirement lifestyle.
- Counting only one retirement account and forgetting to include all sources such as workplace pensions, personal pensions, and investment accounts.
Frequently Asked Questions
How much do I need to retire comfortably?
A common guideline is to aim for 25 times your desired annual retirement spending (based on the 4% withdrawal rule). If you need $40,000 per year in retirement, target a $1,000,000 portfolio. Adjust based on your specific expenses, location, and lifestyle.
What rate of return should I use for retirement projections?
A diversified stock and bond portfolio has historically returned 5-7% after inflation. Use 6-7% for an optimistic scenario, 4-5% for conservative. If your portfolio is heavily in bonds or cash, use the lower end.
When should I start saving for retirement?
As early as possible. Starting at 25 instead of 35 with the same monthly contribution can nearly double your retirement balance due to compound growth. Even small contributions in your twenties have an outsized impact.
How does the 4% rule work?
The 4% rule suggests withdrawing 4% of your portfolio in the first year of retirement, then adjusting that amount for inflation each year. Research shows this approach has a high probability of your money lasting at least 30 years.
Should I pay off debt or save for retirement?
Generally, prioritise employer-matched retirement contributions (free money), then pay off high-interest debt (above 7-8%), then maximize retirement savings. Low-interest debt like a mortgage can be paid off alongside retirement saving.
How does retiring 5 years early affect my savings?
Retiring early has a double impact: you lose 5 years of contributions and growth, and you need your money to last 5 years longer. For example, retiring at 60 instead of 65 might require 20-25% more total savings.
Should I include Social Security or state pension in my retirement plan?
Include it as a supplementary source, but do not rely on it entirely. Government benefits may change over time. Use this calculator to plan based on your own savings, and treat any government pension as a welcome bonus.
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