Retirement Savings Projection
Project your retirement nest egg with current savings, monthly contributions, and expected return rate. See final balance, total contributions, investment growth, and estimated annual income using the 4% rule.
How to use this tool
- Enter current retirement savings, monthly contribution, expected annual return and years until retirement in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your projected nest egg and the full breakdown beneath it.
Retirement projections depend heavily on consistent contributions and long-term compounding. The 4% rule estimates how much annual income your portfolio can safely sustain in retirement.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Future value with monthly compounding: FV = P × (1 + i)m + C × ((1 + i)m − 1) / i
Where P = current savings, C = monthly contribution, i = annual rate ÷ 12, m = years × 12. At zero rate: FV = P + C × m. Annual income estimate uses the 4% rule: income = FV × 0.04.
How it works
This calculator compounds your current retirement savings and monthly contributions forward using a fixed expected annual return, producing a projected balance at retirement. It then applies the widely-cited 4% withdrawal rule to estimate how much annual income that nest egg could sustain.
The 4% rule is a planning heuristic, not a guarantee; actual sustainable withdrawal rates depend on asset allocation, market sequence, fees, and life expectancy. Inflation is not deducted from the projected balance unless your return rate is entered as a real (after-inflation) rate.
Worked example
- Inputs: $0 current savings, $100/month contribution, 0% annual return, 1 year.
- Monthly rate i = 0; use zero-rate formula: FV = 0 + 100 × 12 = $1,200.
- Total contributed = $0 + $100 × 12 = $1,200.
- Investment growth = $1,200 − $1,200 = $0.
Projected nest egg: $1,200 | Total contributed: $1,200 | Investment growth: $0
Common mistakes to avoid
- Using a nominal return rate (e.g. 7%) without adjusting for inflation — the real return is roughly 4-5%, so the projected nest egg buys less than the nominal figure implies.
- Treating the 4% rule withdrawal as a guaranteed income floor; it was derived for 30-year retirements and may not hold for retirements lasting 40+ years.
- Entering current savings in the wrong magnitude (e.g. typing 150 when holdings are $150,000), making the projection appear far below or above reality.
Key terms
- Future value (FV)
- The projected account balance at a future date, accounting for compounding returns on both the initial balance and ongoing contributions.
- Monthly compounding
- Interest is calculated and added to the balance 12 times per year; this is more frequent—and slightly higher—than annual compounding at the same stated rate.
- 4% rule
- A retirement planning guideline suggesting you can withdraw 4% of your nest egg per year and sustain it for 30+ years, based on historical market data.
- Real vs. nominal return
- A nominal return includes inflation; a real return is adjusted for inflation. Entering a real rate gives purchasing-power projections; nominal gives dollar projections.
- Nest egg
- The total accumulated retirement savings balance intended to fund living expenses in retirement.
Frequently asked questions
- What is the 4% rule?
- Research suggests retirees can withdraw 4% of their portfolio in year one, then adjust for inflation annually, with a high probability of the portfolio lasting 30+ years. It's a useful estimate, not a guarantee.
- What return rate should I assume?
- A diversified stock/bond portfolio has historically returned 6-7% after inflation over long periods. Use 5-7% for planning; stress-test with 3-4%.