How the Retirement Savings Calculator works

The calculator uses the future value of a growing annuity formula. It compounds your existing savings at your chosen annual return rate, then adds the future value of your monthly contributions. The result is your projected retirement nest egg. Monthly income is estimated using the 4% safe withdrawal rule — a widely-cited guideline suggesting retirees can withdraw 4% of their portfolio annually without running out of money over a 30-year retirement.

Tips to maximize your retirement savings

• Start early. Thanks to compound interest, every year you wait significantly reduces your final nest egg.
• Maximize employer match. If your employer matches contributions, contribute at least enough to capture the full match — it is free money.
• Use tax-advantaged accounts. 401(k), IRA, Roth IRA and similar vehicles reduce your tax burden now or in retirement.
• Increase contributions with income. Each time you get a raise, increase your monthly contribution by the same percentage.
• Rebalance annually. Keep your portfolio aligned with your risk tolerance by rebalancing stocks and bonds once a year.

Frequently asked questions

How much do I need to retire comfortably?

A common rule of thumb is 25x your annual expenses (the 4% withdrawal rule). For example, if you need $50,000/year in retirement, aim for $1.25 million saved.

What annual return should I use?

A diversified stock/bond portfolio has historically returned 5–7% per year after inflation. Conservative investors often use 5%, aggressive investors use 8–10%.

Does the calculator account for inflation?

The calculator uses nominal returns. For a real (inflation-adjusted) result, subtract expected inflation (approx. 2–3%) from your annual return rate before entering it.

How is the projected monthly income calculated?

We apply the 4% safe withdrawal rule to your projected nest egg: divide the total by 25 to get annual income, then divide by 12 for the monthly figure.

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