Retirement Calculator

What is a retirement calculator?

A retirement calculator estimates how much you could have saved by the time you retire. This one starts from your current savings, adds a fixed monthly contribution, and grows both at a steady expected annual return until your retirement date. It reports the projected total, how much of that you paid in, and how much came from investment growth.

The formula

FV = S × (1 + r)^n + C × [((1 + r)^n − 1) ÷ r]

• S is your current savings (optional, defaults to 0).
• C is your monthly contribution (optional, defaults to 0).
• r is the monthly rate: expected annual return ÷ 12 ÷ 100.
• n is the number of months: years to retirement × 12. Years are a whole number.

The first part grows today's savings with monthly compounding. The second part is the future value of an ordinary annuity, which assumes each contribution goes in at the end of the month, the same convention as the FV function in spreadsheets. At a 0% return, contributions simply add up to C × n.

"Total contributions" is your current savings plus all monthly contributions. "Total growth" is the projected total minus that.

Worked example

You're 30 years from retirement, have 50,000 saved, and plan to add 500 a month. Assume an example return of 7% a year:

1. Monthly rate: r = 7 ÷ 12 ÷ 100 = 0.0058333.
2. Growth factor over 360 months: (1.0058333)^360 = 8.116497.
3. Current savings grow to 50,000 × 8.116497 = 405,824.87.
4. Contributions grow to 500 × (8.116497 − 1) ÷ 0.0058333 = 609,985.50.
5. Projected savings: 405,824.87 + 609,985.50 = 1,015,810.37.

You paid in 230,000 (50,000 + 360 × 500). The other 785,810.37 is growth.

Why starting early matters

500 a month with no starting balance, at the same 7% example return:

The extra 10 years from 30 to 40 add 60,000 in contributions but more than double the result. In the later years most of the increase comes from growth on the balance you've already built.

Adjusting for inflation

Prices rise over time, so a sum in 30 years will buy less than it does today. The calculator doesn't adjust for that. Two simple ways to do it yourself, using an assumed 3% inflation rate as an example:

• Deflate the result. Divide by (1.03)^30 = 2.427262. The 1,015,810.37 above is worth about 418,500 in today's money. This assumes your 500 a month never increases.
• Use a real return. Enter the expected return minus inflation, 7 − 3 = 4%. That gives 512,699.60, already in today's money, and roughly models raising your contribution with inflation each year. It's an approximation, but a common one.

In the US, the Bureau of Labor Statistics' CPI inflation calculator shows how much prices have actually changed in past years, which can help you choose an assumption.

How to use the calculator

1. Enter your current savings for retirement (or leave 0).
2. Enter how much you'll contribute each month.
3. Enter an expected annual return as a percentage.
4. Enter the number of years to retirement.
5. Click Calculate to see projected savings, total contributions and total growth.

What this projection leaves out

• Variable returns. Real investments go up and down; a steady rate is a simplification.
• Fees and taxes, which reduce what you keep.
• Employer contributions or tax relief, which can add to it. Include employer contributions in the monthly figure if you want them counted.
• Changes to your contributions over time, other than through the real-return approach above.
• What happens after you retire. The calculator stops at your retirement date and doesn't model withdrawals.

Related calculators

• Compound interest calculator: growth of your current savings on their own.
• SIP calculator: monthly investing with deposits at the start of the month.
• Budget calculator: find how much you can contribute each month.
• ROI calculator: the return on an investment over a period.

Results are estimates for illustration and aren't financial advice; actual investment returns are not guaranteed and may differ.