Retirement Planning: How Much Do You Really Need to Save?
Retirement planning is one of the most important financial tasks you'll undertake. The earlier you start, the less you need to save each month thanks to compound interest...
Retirement Savings Calculator
Calculate how much to save monthly to reach your retirement goal
Advertisement
Ad space
Formula
Formula
FV = PV(1+r)^n + PMT × [((1+r)^n - 1) / r]; Required = Annual Need × 25
Future value combines compound growth of current savings plus future contributions. The 4% rule (25x annual expenses) estimates required nest egg.
How to Calculate Manually
- 1 Determine your current age and target retirement age
- 2 Calculate years until retirement
- 3 Estimate your current retirement savings
- 4 Determine how much you can save monthly
- 5 Choose a realistic expected return (6-8% for balanced)
- 6 Account for inflation (typically 2-3%)
- 7 Calculate future value of current savings
- 8 Calculate future value of monthly contributions
- 9 Sum both for total projected savings
- 10 Apply 4% rule: multiply annual income need by 25
- 11 Compare projected vs required savings
Advertisement
Ad space
Reference Table
| Age Started | Monthly Needed for $1M at 65 (7% return) | Total Contributions |
|---|---|---|
| 25 | $381 | $182,880 |
| 30 | $555 | $233,100 |
| 35 | $820 | $295,200 |
| 40 | $1,234 | $370,200 |
| 45 | $1,920 | $460,800 |
| 50 | $3,050 | $549,000 |
Frequently Asked Questions
-
How much do I need to retire?
-
What return rate should I assume?
-
Does this account for inflation?
Advertisement
Ad space