Retirement Calculator
Project your retirement nest egg from current savings, annual contributions, and an expected return rate, plus an estimated monthly retirement income.
How It's Calculated
Formula
\text{Nest Egg} = S(1+r)^t + C\left[\frac{(1+r)^t - 1}{r}\right] \qquad \text{Monthly Income} = \frac{\text{Nest Egg} \times 0.04}{12}This calculator projects a retirement nest egg using the standard compound-growth formula for a starting balance plus a series of equal annual contributions (an ordinary annuity, with each contribution applied at year-end). Your current savings grow at the expected annual return rate for every year until retirement, and each year's contribution grows for the remaining years it has left to compound. The estimated monthly retirement income applies the widely cited '4% rule' — a common financial-literacy convention that assumes withdrawing 4% of the nest egg per year is broadly sustainable over a long retirement. This is a general heuristic, not personalized financial advice or a guarantee: actual sustainable withdrawal rates depend on market performance, inflation, retirement length, and individual circumstances.
Worked Examples
Age 45 to 65, $50,000 saved, $6,000/year, 7% return
- Years to retirement: 65 − 45 = 20
- Growth on current savings: 50,000 × (1.07)^20 ≈ $193,484
- Growth on contributions: 6,000 × [((1.07)^20 − 1) / 0.07] ≈ $245,973
- Projected nest egg: 193,484 + 245,973 ≈ $439,457
- Estimated monthly income (4% rule): (439,457 × 0.04) / 12 ≈ $1,465/month
Zero expected return: age 30 to 40, $10,000 saved, $2,000/year
- With a 0% return, growth adds nothing — the nest egg is simply the sum of savings and contributions
- Projected nest egg: 10,000 + (2,000 × 10) = $30,000
Frequently Asked Questions
What is the '4% rule,' and is it guaranteed to work?
The 4% rule is a commonly cited starting point for how much a retiree might withdraw annually from savings without running out of money over a typical multi-decade retirement, based on historical market analysis. It's a general heuristic, not a guarantee — it doesn't account for your specific market returns, inflation, retirement length, or spending needs, and shouldn't be treated as personalized financial advice.
When are annual contributions assumed to be made?
This calculator assumes each year's contribution is made at the END of that year (an 'ordinary annuity'), which is the standard convention for this type of projection. A contribution made at the start of the year instead would compound for one additional year and produce a slightly higher total.
Does this account for inflation, taxes, or employer matching?
No — this calculator projects nominal (not inflation-adjusted) growth from your own contributions and expected return only. It does not model taxes, fees, or an employer match; if you have an employer match, add it to your entered annual contribution to include it in the projection.
What happens if I enter a 0% expected return?
The projection becomes a simple sum with no compounding: your current savings plus each year's contribution added up, with no investment growth applied — a useful baseline for comparing against a growth scenario.