Retirement savings calculator

How much do you need to save each month to retire comfortably? Adjust any parameter below and results update instantly. All figures are in today's dollars — inflation is already accounted for.

How to read this: Every dollar amount on this page is in today's purchasing power — inflation is already factored in. The "invest per month" result is what to start contributing now. Each year, increase your actual deposit by the inflation rate so it keeps its real value. For example, with 3% inflation, $1,607/month today becomes roughly $4,521/month in nominal terms by age 65 — a bigger number, but it buys the same things. The gap between the two lines on the chart is compound interest at work.

This calculator is for educational purposes only and does not constitute financial advice. It uses a simplified constant-return model. Real investment returns vary year to year, and sequence-of-returns risk can materially affect outcomes. Social Security, pensions, employer matches, taxes during accumulation, and other income sources are not modeled. See methodology and limitations.

Nest egg needed at age 65
$1,411,765
in today's dollars
Invest per month from now
$1,607
in today's dollars, from age 30 to 65
Where the money comes from
$674,797
total invested in today's dollars over 35 years
$736,967
from investment growth
52%
of your nest egg is from investment growth
Portfolio growth from age 30 to 65 (today's dollars)

Parameters

Retirement spending
$ /month
%
Your situation
$
Assumptions
%/year
%/year
%/year
Real (inflation-adjusted) return: 3.88% per year. This is the growth rate of your purchasing power: (1 + 7%) ÷ (1 + 3%) − 1.
Methodology

All calculations use real (inflation-adjusted) returns, so every dollar figure represents today's purchasing power. "Invest $X/month" is the real amount to start contributing now, on top of any existing savings. During the plan, you would increase the amount you save each year by the inflation rate to maintain the same real value. The monthly contribution is the amount going into your retirement account; income taxes on the earnings used for that contribution are outside this model.

Step 1 — Required nest egg:

  • After-tax monthly spending × 12 = annual spending. Divided by (1 − tax rate) = first-year pre-tax withdrawal.
  • First-year pre-tax withdrawal ÷ initial withdrawal rate = required portfolio at retirement.
  • This follows the usual initial-withdrawal-rate convention: the first dollar withdrawal is set at retirement, then later dollar withdrawals are assumed to rise with inflation. It is not a rule that withdraws the same percentage of the remaining portfolio each year.

Step 2 — Real return:

  • Real annual return = (1 + annualized nominal return) ÷ (1 + inflation) − 1. For effective annual rates, this is the Fisher equation, which is exact (not the approximation "nominal − inflation").
  • Monthly real return = (1 + annual real return)1/12 − 1, converting via proper compounding (not dividing by 12).

Step 3 — Monthly savings:

  • If you have existing savings, they compound at the real return rate over the saving period. Future real value of current savings = current savings × (1 + r)n.
  • The remaining gap = target portfolio − future real value of current savings. If this gap is zero or negative, your current savings are already sufficient with no new contributions needed.
  • Otherwise, using the future value of an ordinary annuity formula, solved for the payment: PMT = gap × r ÷ ((1 + r)n − 1).
  • This assumes contributions are made at the end of each month. Beginning-of-month contributions would require a slightly smaller payment.
  • where r = real monthly return and n = total months of saving.

Step 4 — Balance at each age:

  • Balance after m months = current savings × (1 + r)m + PMT × ((1 + r)m − 1) ÷ r
  • Money invested = current savings + PMT × m (starting savings plus new contributions)
  • Investment growth = Balance − Money invested. If the real return is negative, this component is negative.

What "today's dollars" means concretely:

  • If the calculator says "invest $900/month" and inflation is 3%, then right now you invest $900/month in nominal terms. One year later you invest $927 ($900 × 1.03). The year after, $955. Each year you invest more nominal dollars, but each contribution buys the same goods and services as $900 buys today.
  • The nest egg works the same way. "$1.4M" means $1.4M in today's purchasing power. Your account statement at retirement will show a larger nominal number, but it will buy the same things.

Limitations:

  • Constant returns. Real markets are volatile. This model assumes the same return every year, ignoring sequence-of-returns risk — bad returns early in retirement are much worse than bad returns late. This is a significant simplification.
  • No Social Security or pensions. These income sources reduce the amount you need from savings. Not modeled.
  • No employer match. Employer 401(k) matches effectively increase your savings rate. Not included.
  • Simplified taxes. A single flat rate is used. Real tax situations involve brackets, deductions, and multiple account types (traditional, Roth, taxable) with different rules. The tax input applies only to retirement withdrawals used for spending; it does not model payroll taxes, income taxes while saving, capital gains taxes, dividends, required minimum distributions, or account contribution limits.
  • The initial withdrawal rate is a rule of thumb. The 4% rule was derived from US historical data (Bengen, 1994; Trinity Study, 1998) for 30-year retirements. It does not guarantee success. Longer retirements, non-US markets, higher fees, higher taxes, or unusual economic periods may require a lower rate.
  • Constant contribution rate. In reality, many people save more as their income grows. This calculator uses a single level contribution each month.

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