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Retirement Calculator: Will Your Savings Last?
Enter your age, savings, monthly contributions and the income you want in retirement. The model projects your pot in today's money, estimates the pot you need and shows any gap.
How this rough model works
The calculator works in today's money so that inflation does not distort the picture. It converts each nominal return to a real return with (1 + return) ÷ (1 + inflation) − 1, then does two calculations.
- Accumulation. Your savings grow at the real pre-retirement return and each monthly contribution is added at month end. The pot at retirement is
S × (1 + i)n + C × ((1 + i)n − 1) ÷ i, withithe real monthly rate andnthe number of months. - Drawdown. The pot you need is the present value of level monthly withdrawals in today's money until the plan-to age:
need × (1 − (1 + j)−M) ÷ j, wherejis the real monthly rate in retirement andMthe number of months.
The difference between the two is the shortfall. Dividing the shortfall by the future value factor gives the extra monthly saving that would close it.
Choosing sensible inputs
- Plan-to age. Running out of money is a bigger risk than leaving some behind. Planning to a late age builds in a margin.
- Income wanted. Many people spend less on work costs and mortgages in retirement but more on healthcare. Start from your actual current spending.
- Other income. Take the figure from a statement or official estimate for your country, as rules and ages vary and change.
- Returns. Test a cautious case. A portfolio that earns the same as inflation has a real return of zero, and the model still works.
What the model cannot capture
Real retirements are bumpier than a smooth average. A market fall just before or after you stop work can shrink a pot permanently if you keep withdrawing at the planned rate, a danger often called sequence-of-returns risk. Spending also changes with age, and one-off costs such as care or home repairs do not fit a level monthly figure. Tax on contributions, growth and withdrawals differs by country and by account type, so it is left out. Fees reduce returns; enter a lower return if you want a rough allowance.
Use the result to compare scenarios, not to decide a date. A planner or pension provider can model your own rules and products.
Using the gap figure
If the calculator shows a gap, you have three main levers: save more, work a little longer, or plan for less income. Changing retirement age has two effects at once, since it adds years of contributions and removes years of drawdown, so even one extra year can move the result more than expected. Try each lever separately. For the saving side alone see the savings calculator, and for a detailed growth model with fees use the investment calculator.
Worked example
A 40-year-old with 60,000 saved adds 900 a month, plans to stop work at 67 and wants 3,500 a month in today's money, of which 1,200 comes from a pension.
Inputs
| Current age | 40 |
|---|---|
| Planned retirement age | 67 |
| Plan to age | 92 |
| Savings so far | 60000 |
| Monthly contribution (today's money) | 900 |
| Return before retirement | 6.5 % |
| Return during retirement | 4 % |
| Assumed inflation | 2.5 % |
| Monthly income wanted (today's money) | 3500 |
| Other monthly income such as a pension (today's money) | 1200 |
Result
Your projection covers the 578,232.14 your target needs, with 100,600.23 to spare (today's money).
| Real yearly return before retirement | 3.90% |
|---|---|
| Real yearly return in retirement | 1.46% |
| Monthly income the projected pot could support | 2,700.15 (plus your other income) |
| Income gap to cover from savings | 2,300.00 a month |
| Pot needed at retirement | 578,232.14 |
| Extra monthly saving to close any gap | 0.00 |
Projected pot before retirement (today's money)
| Age | Balance |
|---|---|
| Age 41 | 73,333.30 |
| Age 42 | 87,186.92 |
| Age 43 | 101,581.17 |
| Age 44 | 116,537.15 |
| Age 45 | 132,076.78 |
| Age 46 | 148,222.83 |
| Age 47 | 164,998.97 |
| Age 48 | 182,429.79 |
| Age 49 | 200,540.84 |
| Age 50 | 219,358.66 |
| Age 51 | 238,910.83 |
| Age 52 | 259,226.02 |
- All amounts are in today's money. Contributions and income are assumed to rise with inflation, and the pot is drawn down to zero at the "plan to age".
- Taxes, fees, one-off costs and changing returns are not modelled. This is a rough illustration, not a forecast.
Financial disclaimer: Results are estimates for planning and education. They are not financial, tax or legal advice. Fees, taxes, rates and rules vary by lender, product and country, so confirm figures with your provider or a qualified adviser before making decisions.
Frequently asked questions
How much do I need to retire?
It depends on the income you want, your other income and how long the money must last. This calculator estimates the pot as the present value of the withdrawals you need until your plan-to age.
Why does the calculator use today's money?
Results in future money are hard to judge. Expressing everything in today's purchasing power makes the pot and the target income directly comparable with your current budget.
Is this the same as the 4% rule?
No. The 4% rule is a rule of thumb for first-year withdrawals. This model uses a level real withdrawal that exhausts the pot at your chosen age, and the answer depends on the returns you enter.
What if I retire early?
Lower the retirement age. Fewer contribution years and more drawdown years both increase the shortfall, and some pensions cannot be accessed before a minimum age.
Does the result include tax?
No. Enter after-tax figures where you can, and check the tax rules that apply to your accounts.
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References and sources
- Standard time-value-of-money texts: future value of an annuity and present value of an annuity.
- Investor.gov (U.S. SEC): educational material on saving for retirement. Link