The Retirement Calculator estimates your retirement readiness by combining current savings, monthly contributions, and expected returns before and after retirement. It also factors in inflation so that the savings target reflects the real purchasing power of your desired retirement spending.
How to Use Retirement Calculator
- Enter your current age, planned retirement age, and expected years in retirement.
- Provide current retirement savings and monthly contributions.
- Set pre-retirement and post-retirement return rates and the expected inflation rate.
- Enter your desired annual spending in today’s dollars.
- Review the projected balance, total needed, and suggested monthly savings.
Formula & Theory - Retirement Calculator
FV_savings = PV × (1+r1)^n + PMT × 12 × ((1+r1)^n - 1) / r1
Spending_at_retire = annual_spending × (1+inflation)^n
Need = Spending_at_retire × (1 - (1 + r_real)^-Y) / r_real
where r_real = (1 + r2) / (1 + inflation) - 1
Use Cases for Retirement Calculator
- Determine if your current savings rate is on track for retirement.
- Test “what if” scenarios such as retiring earlier or spending more.
- Compare contribution amounts needed to close a funding gap.
- Educate clients on how inflation erodes long-term purchasing power.