About the Retirement Calculator
A retirement calculator projects the value of your nest egg at retirement given a starting balance, regular contributions, expected return, and time horizon. Advanced versions add volatility (Monte Carlo) and inflation to estimate how likely the plan is to last.
How it works
- Calculate years until retirement. Retirement age minus current age.
- Compound contributions. Each monthly contribution grows at the expected return over the remaining years.
- Account for inflation. Nominal dollars are converted to today's purchasing power.
- Run Monte Carlo simulation. 2,000+ simulations draw random annual returns from a normal distribution to estimate a success rate instead of a single point.
Formula
- FV = Future value at retirement
- P = Current balance
- PMT = Monthly contribution
- r = Monthly return
- n = Months to retirement
Frequently asked questions
How much should I save for retirement?
A common rule is to save 15% of gross income including any employer match. Another benchmark is to have 1× your salary saved by 30, 3× by 40, 6× by 50, 8× by 60, and 10× by 67.
What is the 4% rule?
The 4% rule suggests withdrawing 4% of your retirement portfolio in the first year, then adjusting for inflation annually. Historical data (Trinity Study, later updates) suggests this supports a 30-year retirement with high probability.
What's a realistic rate of return?
Historical US stock returns average about 10% nominal and 7% real. A balanced portfolio often projects 5–7% real return. Using 10% without volatility can overstate confidence.
What does Monte Carlo tell me?
Monte Carlo simulates thousands of random return paths to estimate the probability your plan survives. A 90%+ success rate is considered robust; below 75% suggests reviewing contribution, asset mix, or retirement age.
Related calculators
Concepts
Sources & methodology
- Monte Carlo volatility parameters reflect long-run US equity market data (S&P 500 σ ≈ 15–17%).