📋 Embed this calculator on your site — free, forever
No attribution required • Stays updated automatically • Works on any website or blog • Preview live →
Advertisement
336x280 · Finance/Insurance · Est. CPM $22-$48
How the retirement projection formula works
The calculator combines two components: the future value of your existing savings, and the future value of your ongoing monthly contributions.
Formula: Total pot = S × (1+r)ⁿ + C × [(1+r)ⁿ − 1] / r — where S = current savings, r = monthly return rate, n = months to retirement, C = monthly contribution
The 4% withdrawal rule is then applied to estimate sustainable annual income: Annual draw = Total pot × 0.04. This rule, from the Trinity Study, suggests a 30-year retirement withdrawal rate of 4% has historically survived all market conditions.
Using nominal not real returns. A 7% nominal return with 3% inflation is only 4% in real purchasing power. For inflation-adjusted projections, enter 4–5% instead of 7–8%.
Ignoring employer match. If your employer matches 3% of salary, that is a 100% instant return on that portion. Always contribute at least enough to capture the full match before anything else.
Underestimating retirement spending. Many people plan on needing 70% of pre-retirement income. Healthcare costs alone can run $6,000–$12,000/year out of pocket in early retirement.
Not accounting for Social Security. The average US Social Security benefit is around $1,700/month. If you expect to receive this, your portfolio only needs to cover the gap — which dramatically changes the required pot size.
Stopping contributions during market downturns. Contributions made during downturns buy more units and compound more aggressively when markets recover. Consistency beats timing every time.