How to use
- Enter your current age, the age you plan to retire and your life expectancy. The plan is judged by whether your money lasts until that age.
- Add what you have saved so far and how much you will contribute each month until retirement.
- Set an expected annual return, an inflation rate and the monthly spending you want in retirement, in today’s money. Your projected savings, the nest egg you need and any shortfall appear instantly.
- The yearly table shows the balance at each age, also converted to today’s money. Use Copy table to paste it into a spreadsheet.
The calculator works with any currency.
How it’s calculated
r = expected annual return, π = annual inflation, n = months until retirement, m = months from retirement to life expectancy.
| Item | Formula |
|---|---|
| Monthly return i | (1 + r)^(1/12) − 1, so twelve months of growth equal exactly r a year |
| Savings at retirement | savings × (1 + i)ⁿ + monthly contribution × ((1 + i)ⁿ − 1) ÷ i, contributions at month-end |
| First month of spending | spending today × (1 + π)^(years to retirement) |
| Nest egg needed | Spending is withdrawn at the start of each month and rises with inflation every month; the m withdrawals are discounted back to retirement at rate i and added up |
| Monthly saving needed | (nest egg − savings × (1 + i)ⁿ) × i ÷ ((1 + i)ⁿ − 1) |
Money left invested after retirement keeps earning the same return. The yearly table is a month-by-month simulation under the same assumptions; “in today’s money” divides each balance by the inflation accumulated up to that point.
Example
Age 35, retiring at 65, life expectancy 90, 50,000 saved, 1,000 a month, 6% return, 2.5% inflation and 4,000 a month of spending in today’s money:
| Item | Result |
|---|---|
| Projected savings at 65 | 1,261,687.53 (about 601,500 in today’s money) |
| First month of spending | 8,390.27 |
| Nest egg needed | 1,705,712.61 |
| Shortfall | 444,025.08 |
| Monthly saving needed | 1,455.64 (455.64 more than now) |
| Money runs out | at about age 81 and 2 months |
Thirty years of 2.5% inflation turns 4,000 into almost 8,400 a month, which is why planning in today’s money alone badly understates the goal.
Things to keep in mind
- Results are for reference only. Real returns vary from year to year, and a market drop early in retirement can drain savings faster even when the long-run average is the same.
- Pensions, annuities and Social Security are not modelled separately. Subtract the monthly income you expect from them from your spending target.
- Taxes, fund fees, large one-off costs and rising contributions are not included. Withdrawals from tax-deferred accounts may be taxed.
- To see how savings compound in detail, use the compound interest calculator; for what money is worth over time, try the inflation calculator.
FAQ
What return should I enter?
There is no single right number. Base it on your mix of investments, and run a second scenario with a lower return to see how sensitive the plan is.
What does “in today’s money” mean?
It is a future amount expressed in current prices. With 2.5% inflation, what 1,261,687 buys in 30 years costs about 601,500 today.
Is anything I enter saved or sent anywhere?
No. All calculations run in your browser.