How retirement savings are projected

Saving years use monthly compounding

Current savings, the monthly contribution, and the annual rate you enter are projected to the retirement age. Interest is posted each month on the balance at the start of the month. The contribution is added after that interest. This is the same monthly schedule the compound interest calculator uses.

Contributions stop at the retirement age. If you raise the growth percent, the contribution increases at the start of each later saving year. The rate is not looked up from a bank or a market index.

The goal is a balance you type

The goal is compared with the balance at retirement. A positive gap means the projection is ahead of the goal. A negative gap means it is short. The page also solves for a whole-dollar monthly contribution that would reach the goal by that age. One dollar less falls short in this model.

The example on this page uses the calculator default savings, contribution, rate, and ages. Those figures illustrate the schedule. They are not a savings requirement.

Withdrawals start after contributions stop

When withdrawals are included, the same monthly rate continues. Each month posts interest, then takes the withdrawal, and the withdrawal cannot exceed the balance. The illustration runs for the number of years you enter, or stops sooner if the balance reaches zero.

Social Security, pensions, taxes, fees, and inflation are not calculated. A dollar in the result is a nominal dollar in this model. It is not adjusted for a change in prices, and it is not a retirement plan.

Needs review before launch. Social Security, income tax, and inflation are not calculated.

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Related guides

• How compound interest is estimated
• How rental cash flow is estimated

Read the methodology

Written to explain how this site’s calculators work. Not a review by a licensed mortgage professional, and not a recommendation to borrow. These notes are not financial, tax, or legal advice.