Retirement Savings Calculator
Calculates the monthly savings amount you need to reach a target retirement nest egg, given your current age, retirement age, and existing savings. Use it to check whether you are on track or need to save more.
About this calculator
This calculator assumes a fixed 7% annual return — a widely used proxy for long-term stock market growth after inflation. First, it projects how much your current savings will grow by retirement: FV_current = currentSavings × (1.07)^(retirementAge − currentAge). The gap between this projected value and your target is what additional monthly contributions must cover. The required monthly savings is then: monthlyRequired = (targetAmount − FV_current) / [((1.07)^n − 1) / 0.07] / 12, where n is the number of years until retirement. This formula inverts the future value of an annuity equation to solve for the payment needed. Note that the 7% rate is hardcoded as an assumption; actual returns will vary based on your portfolio mix and market conditions.
How to use
Suppose you are 35 years old, plan to retire at 65, have $50,000 saved, and want a $1,000,000 nest egg. Years to retirement: n = 30. FV of current savings: 50,000 × (1.07)³⁰ = 50,000 × 7.6123 = $380,615. Gap: 1,000,000 − 380,615 = $619,385. Annuity factor: ((1.07)³⁰ − 1) / 0.07 = (7.6123 − 1) / 0.07 = 6.6123 / 0.07 = 94.461. Monthly required = 619,385 / 94.461 / 12 ≈ $547 per month.
Frequently asked questions
How much should I have saved for retirement by age?
A common benchmark is to have saved 1× your annual salary by age 30, 3× by 40, 6× by 50, and 8× by 60, according to guidelines from firms like Fidelity. However, the right target depends heavily on your expected retirement lifestyle, Social Security income, and planned retirement age. This calculator lets you set your own target amount, which is more personalized than generic multiples. A financial planner can help you estimate the nest egg needed to sustain your specific annual spending in retirement.
Why does this retirement calculator use a 7% return assumption?
7% per year is a historically grounded estimate for long-term real (inflation-adjusted) returns on a diversified stock portfolio, based on average U.S. stock market performance over many decades. It is a widely used planning assumption by financial advisors and retirement calculators. However, actual returns vary year to year, and your portfolio's stock-to-bond ratio significantly affects expected growth. More conservative portfolios might assume 4–5%, while aggressive equity portfolios might use 8–9%. Treat the 7% figure as a reasonable baseline, not a guarantee.
What happens to my required monthly savings if I start saving for retirement later?
Starting later dramatically increases the monthly contribution needed because you have fewer years of compound growth working for you. For example, starting at age 25 vs. 35 to reach a $1,000,000 goal with $0 saved requires roughly $380/month vs. $820/month assuming 7% returns — more than double the monthly burden. Each decade you delay roughly doubles or triples the required monthly saving. The earlier you begin, the more your money compounds, and the less financial strain you face each month.