How this retirement savings calculator works

Retirement saving is one of the few money problems where the maths is genuinely simple — and genuinely surprising. This calculator projects what your retirement savings could grow to by combining three things: what you have already saved, what you add each month, and the return those investments earn, compounded monthly over the years until you retire.

Enter your current age and the age you plan to retire, your existing savings, how much you can contribute each month, and the annual return you expect. The calculator instantly shows your projected total, how much of it came from your own contributions versus growth, what that total is worth in today’s money after inflation, and a sustainable monthly income figure based on the well-known 4% rule. Everything is computed in your browser — no sign-up, no data leaves your device, and your last inputs are remembered for next time.

The formula behind your projection, explained simply

Behind the scenes the calculator uses two standard finance formulas, both with monthly compounding:

• Your existing savings grow with compound interest: today’s lump sum multiplied by the monthly growth factor, raised to the number of months. This is the same maths behind our compound interest calculator — a small sum left alone for decades can grow far more than most people expect.
• Your monthly contributions grow as an annuity: each payment compounds for a different length of time, and the formula adds up the future value of all of them.

Your projected total is simply those two figures added together. “Growth earned” is that total minus everything you personally put in (your starting savings plus all monthly contributions). The inflation-adjusted figure divides the total by cumulative inflation, so you can compare it honestly with prices today. The monthly income figure takes 4% of your projected total per year — the classic 4% rule popularised by retirement research — and divides it by twelve.

Worked example: starting at 25 vs 35

Nothing demonstrates compounding like a head-to-head. Imagine two savers who both retire at 65, both already have $10,000 saved, both contribute $500 a month (including any employer match), and both earn a 7% average annual return:

The ten-year head start cost the late starter only $60,000 extra in contributions — but it cost them roughly $784,000 in projected total. That gap is pure compounding: the early saver’s money had a whole extra decade to earn returns on returns. If you are young, time is by far your biggest asset. If you are starting later, the answer is not despair — it is a higher monthly contribution. Try it above: bump the monthly figure until the projection looks like the retirement you want.

The 4% rule: turning a lump sum into monthly income

A big projected number feels abstract until you convert it into a pay cheque. The 4% rule — from the influential Trinity study on retirement withdrawals — suggests you can withdraw about 4% of your savings in the first year of retirement, then adjust for inflation each year, with a good chance the money lasts 30 years. The calculator applies that to your projected total and shows the monthly equivalent.

It is a rule of thumb, not a guarantee: it assumes a balanced portfolio of shares and bonds, and it was built on US market history. Use the figure as a sanity check — “does this monthly number cover the life I want?” — rather than a promise.

What annual return should you assume?

Your assumed return is the single most powerful input after time, so choose it honestly:

• 7% — the long-run average. US shares have returned roughly 10% a year nominally over the last century, about 7% after inflation.
• 5% — the conservative view. Sensible if you want a margin of safety in your planning.
• 10%+ — optimistic. Possible in a strong all-equity run, but building your whole plan on it leaves no room for bad decades.
• 0–3% — cash savings. If your money sits in a savings account, be honest about it — and notice how much the projection shrinks.

A good habit: run the numbers at 7% and again at 5%. If your plan still works at 5%, it is robust. Past performance never guarantees future results.

Why we show your total “in today’s money”

A million dollars in 2060 will not buy what a million dollars buys today. At 2.5% inflation, prices roughly double every 29 years — so $1,000,000 at a retirement 35 years away has the spending power of about $424,000 today. The “in today’s money” figure applies your inflation assumption across your whole saving horizon, giving you the number your brain can actually use: “what lifestyle does this buy me, in prices I recognise?” If that figure feels small, you have three levers — contribute more, retire later, or aim for a higher return.

Small changes, big differences

Three levers matter more than everything else combined. Start earlier — as the worked example shows, a decade is worth hundreds of thousands. Contribute more — every extra $100 a month for 30 years at 7% adds roughly $122,000 to your total. And capture the full employer match — include it in your monthly figure above. Just got a pay rise? Our pay raise calculator shows your new take-home — consider routing part of the increase straight into your monthly contribution before lifestyle inflation spends it for you.< Before locking money into long-term savings, check the true cost of any existing debt with our personal loan calculator./p>