Retirement Calculator: Formula and Examples
Compare projected savings with a corpus needed to fund inflation-adjusted retirement spending.
How the calculation works
Spending increases with inflation. The model begins withdrawals at retirement, ends at the planning age, and excludes pension income, taxes, fees, and a reserve beyond that age.
Retirement formula
Retirement corpus = sum of future monthly expenses discounted at the assumed post-retirement return. Compare with current savings plus monthly investments grown to retirement.
Worked example
With 0% inflation and return, $3,000 monthly for 25 retirement years needs $900,000 before any other income.
Inputs, assumptions, and interpretation
Amounts and rates apply only to the defined scenario. For projections, returns remain constant and timing follows the selected input. Taxes, market variability, and unentered costs are excluded.
Displayed values are rounded, while calculations use unrounded numbers. The charts show modeled values rather than historical performance. For background, see Investor.gov introduction to investment returns.
Frequently asked questions
Are the default rates guaranteed?
No. Default inputs illustrate how the calculation works. Enter rates and contribution amounts relevant to your scenario, and review the applicable account or scheme terms.
Why might an actual statement differ?
Actual payment dates, compounding conventions, changing returns, fees, tax treatment, and account rules can differ from a simplified projection.
How should I interpret a negative result?
Some comparisons or value changes can be negative, including investment losses or a gap between alternative scenarios. Read the result labels to distinguish a balance from a change in value.