Retirement Calculator

Retirement planning comes down to one question: will the money you save be enough to fund the life you expect? Answering it honestly requires two estimates at once — what your savings could grow into, and what your spending will cost decades from now. Most people only do the first half. The inflation half is where plans quietly fall apart.

This calculator does both halves at once: it projects the future value of your savings and monthly contributions, then converts your desired income into future dollars using your inflation assumption, so the two numbers are comparable. The result is a surplus or shortfall you can still act on.

What it measures

Three numbers. First, your projected nest egg at retirement: the future value of today’s savings and ongoing monthly contributions, compounded at your expected return. Second, your income need in future dollars: what your desired annual spending costs after inflation erodes the dollar’s purchasing power year after year. Third, the gap — nest egg minus total need across your retirement years — shown as a surplus or shortfall.

The two bars compare projected savings against the inflation-adjusted total need, scaled so the larger always fills its bar.

How it works

The savings side compounds monthly. Your current balance grows at one-twelfth of the annual return for every month until retirement, and each monthly contribution compounds from the month it is made. The need side inflates annually: your desired income is multiplied by the inflation assumption raised to the years until retirement, then by your years in retirement.

Every figure recalculates as you edit, so you can watch small changes — a higher return, five more years — in real time.

Each input, explained

Current age / retirement age — defaults 35 and 65, giving a 30-year horizon. The retirement age must be higher than the current age; anything else is rejected.

Current savings — what you have already put away for retirement, defaulting to $50,000. Enter the full balance of retirement accounts, not just cash.

Monthly contribution — what you add each month, default $800. Contributions are assumed to grow at the same return as everything else, with no salary-increase schedule built in.

Expected annual return — default 7%, labeled as an example assumption. It is a nominal, average, before-tax return — not a prediction and not a promise.

Inflation assumption — default 3%, labeled as an example. It affects only the spending side: how much future dollars lose purchasing power.

Desired annual income in today’s dollars — default $60,000. State what you want to spend per year in today’s purchasing power; the calculator handles the inflation math.

Years in retirement — default 25. A planning horizon, not a life expectancy forecast.

Worked example

Take the defaults: age 35, retiring at 65 (30 years), $50,000 already saved, $800 contributed monthly, 7% return, 3% inflation, $60,000 of desired annual income in today’s dollars, 25 years in retirement.

On the savings side: the $50,000 grows at 7% compounded monthly for 360 months — 50,000 × 1.005833^360 — to about $405,825. The $800 monthly contributions compound the same way to about $975,977. The projected nest egg: roughly $1,381,802.

On the need side: $60,000 inflated at 3% for 30 years — 60,000 × 1.03^30, and 1.03^30 is 2.427 — becomes about $145,636 per year in future dollars. Over 25 years of retirement that totals roughly $3,640,894. The gap: $1,381,802 minus $3,640,894 — a shortfall of about $2,259,092.

That gap is the point of the tool. Closing it means changing an input: higher contributions, a later retirement date, lower desired spending, or some combination. Watch how sensitive the need side is to inflation — at 4% instead of 3%, the 30-year multiplier becomes 3.243 and the shortfall gets far worse.

Limitations

This is a deliberately simplified model, and it says so in the output. It ignores taxes — 401(k) withdrawals are taxed as ordinary income, and that haircut is real. It ignores fees, which compound against you just as relentlessly as returns compound for you. It assumes a smooth, constant return every year, which never happens: sequence risk — a bad market early in retirement — can sink a plan that looks fine on average.

It also measures wealth, not income strategy: it does not model Social Security, pensions, or withdrawal sequencing across account types. For the argument behind the default 7% assumption, see The Case for Boring Investing: What Index Data Shows Over Decades.

Frequently asked questions

Why is the shortfall so large in the example? Because inflation compounds too. At 3% a year, prices more than double over 30 years, so $60,000 of today’s spending costs about $145,636 per year at retirement — the side of the ledger most people underestimate.

Is 7% realistic? It is the number many long-horizon models use as a nominal assumption for diversified equity exposure, before inflation and fees. It is not a forecast. Run the calculator at 5% and 9% too, and treat the spread as your margin of ignorance.

Should I count my house as current savings? No, unless you plan to sell and downsize. Include only investable retirement savings.

Does this account for employer 401(k) matches? Only if you fold them into the monthly contribution figure. Add your match to what you enter as your own contribution.

What about Social Security? It is excluded. The calculator models only the savings gap you need to close yourself — which is the part you can actually control. Estimate your benefit separately at ssa.gov and subtract it from the need.

The gap is huge. What moves it fastest? Usually time and contributions: retiring five years later extends compounding and shortens the spending window, and raising monthly contributions is the lever you control today.

More tools in the Cents & Sense: the loan amortization calculator shows how interest eats into a mortgage or loan, and the currency converter handles cross-border amounts at live rates.

This calculator is an educational tool. It simplifies taxes, fees, market volatility, and withdrawal strategy out of existence — real planning needs more. Nothing here is financial or tax advice.