Retirement Savings
What today's savings and a monthly deposit become by retirement, and the gap against the target.
Enter your numbers
Example: 30
Example: 65
Example: 20000
Example: 200
Example: 7
Example: 3000
Recent
Formula
How the calculation works
Two things grow together: the savings already there, compounded for the whole period, and the monthly deposits, each compounded for the months it has left. Adding them gives the projected pot.
The target is built from the income you want, using the 4% rule -- twenty-five times the yearly draw. A 3,000-a-month retirement means 36,000 a year, so 900,000 is the pot. The gap between that and the projection is the number the plan has to close.
Common mistakes
- Treating the 4% rule as a promise. It is a planning assumption drawn from historical returns, and a bad decade at the start can change the safe rate.
- Counting only the monthly deposits and forgetting the savings already invested, which compound for the full period and often do more work than the new contributions.
When to use it
- Use it when you want to know whether the current deposit habit reaches the retirement income you have in mind.
- It is also the tool for the deposit question: raise the monthly figure and watch the gap close, which turns a vague worry into a number to aim at.
Worked example
At 30 with 20,000 saved and 200 a month at 7%, the pot reaches 590,334 by 65; a 3,000-a-month income needs 900,000, leaving a gap of 309,666.
Common questions
How is the target worked out?
By the 4% rule: twenty-five times the yearly draw. 3,000 a month is 36,000 a year, so 900,000 is needed. It is a planning assumption, not a promise.
What if the gap is negative?
It means the pot lands above the target, so at these assumptions you are on track or could ease the monthly deposit.
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