Retirement Calculator

Why Plan for Retirement?

Planning for retirement is one of the most important financial goals you can have. A retirement calculator helps you visualize your financial future by estimating how much your savings will grow over time. By adjusting your contributions, timeline, and expected returns, you can create a clear plan to reach your goals.

Key Factors in Your Retirement Plan

• Current Age & Retirement Age: This determines your investment horizon. The longer you have until retirement, the more time your money has to grow through compounding.
• Current Savings: Your starting point. A larger initial amount gives you a significant head start.
• Monthly Contribution: The amount you regularly save. Consistent, disciplined contributions are the engine of your retirement plan.
• Annual Return Rate: The average annual return you expect on your investments. This is influenced by your investment choices (e.g., stocks, bonds) and market performance. Historically, a diversified portfolio of stocks has returned around 7-10% annually, but past performance is not a guarantee of future results.

What's Next? The 4% Rule

This calculator estimates your total savings nest egg. The next step is to determine if that amount is enough. Financial planners often recommend the "4% Rule" as a guideline. It suggests you can safely withdraw 4% of your savings in your first year of retirement, and then adjust that amount for inflation each subsequent year, with a high probability of your money lasting for at least 30 years.

For example, if you retire with $1,000,000, the 4% rule suggests you could withdraw $40,000 in your first year.

The Retirement Savings Formula

The calculator combines two formulas: one for the future value of your current savings and another for the future value of your ongoing contributions.