How the retirement projection works
The calculator applies compound growth to your current balance and to each future contribution, then estimates a sustainable withdrawal from the resulting nest egg. Two formulas do the work. The future value of a starting balance P after n years at annual return r is FV = P × (1 + r)^n. The future value of an annuity — a stream of yearly contributions C — is FV = C × ((1 + r)^n − 1) / r. Adding them gives your projected retirement balance.
Worked example
A 30-year-old with $10,000 saved, contributing $500 per month ($6,000 per year), earning a 7% real return, will retire at 65 with roughly $938,000. Wait until 40 to start with the same contribution and you land near $438,000 — less than half, for missing only ten years. That gap is the compounding tax on delay, and the retirement calculator makes it visible instantly.
| Start age | Years invested | Projected balance |
|---|---|---|
| 25 | 40 | $1.32M |
| 30 | 35 | $938K |
| 35 | 30 | $654K |
| 40 | 25 | $438K |
| 45 | 20 | $286K |
The 4% rule and safe withdrawal rates
Once you retire, how much can you spend from the portfolio each year without running out? The Trinity study and follow-up research popularized the 4% rule: withdraw 4% of the balance in year one, then adjust that dollar amount for inflation each subsequent year, and a diversified stock-and-bond portfolio has historically supported a 30-year retirement. A $1M nest egg thus supports about $40,000 of first-year spending, or roughly $3,300 per month.
The three inputs that dominate the result
- Time horizon. Every extra year of compounding grows the outcome roughly by the return rate — 7% more balance per year, ignoring contributions.
- Savings rate. Retirement is funded by the gap between income and spending; personal savings rate, not raw income, is the biggest lever.
- Real return. Use a real (after-inflation) return of 5%–7% for a diversified portfolio; using nominal 10% will overstate the nest egg's purchasing power by decades' worth of inflation.
Tax-advantaged accounts amplify the result
Contributions to a 401(k) or traditional IRA reduce current taxable income and grow tax-deferred; Roth 401(k) and Roth IRA contributions are after-tax but withdrawn tax-free in retirement. The 2026 employee 401(k) contribution limit is $23,000 with an additional $7,500 catch-up at age 50+. Employer matches are essentially free money — a full match on a 6% contribution is a 100% return on those dollars before any market return.
Sensitivity: what small changes are worth
- Raising the savings rate from 10% to 15% of income shortens the years-to-retirement by roughly 8–10 years.
- Cutting portfolio fees from 1% to 0.1% adds 20%–30% to the final balance over a 40-year horizon.
- Delaying retirement by two years is often equivalent to another decade of contributions in terms of sustainable income.
How to use this retirement calculator
- Enter your current age and target retirement age.
- Enter your current retirement savings and expected monthly contribution.
- Set a realistic real return — 5%–7% for a diversified stock-and-bond portfolio.
- Read the projected balance and the 4%-rule sustainable annual income.
- Adjust inputs to test earlier retirement, higher contributions, or lower returns.
Companion tools
Pair the retirement calculator with the compound interest calculator to isolate the effect of a single-return assumption, the inflation calculator to see how prices erode purchasing power over 30 years, the investment calculator to model lump-sum vs. periodic contributions side by side, the salary calculator to size a percent-of-gross contribution, and the income tax calculator to weigh traditional against Roth contributions.