Retirement Calculator

Estimate your future nest egg and annual withdrawals.

The formula

Each year: Balance = (Balance + Annual contribution) × (1 + return rate)
Inflation-adjusted balance = Balance ÷ (1 + inflation)^years
Annual withdrawal = Adjusted balance × r ÷ (1 − (1 + r)^−30)
Annual contribution
Added at the start of each year, so it earns a return in the year it is paid.
Return rate
Assumed annual investment return, applied every year without variation.
Inflation rate
Used only to restate the final balance in today’s money. It does not affect the contributions, which stay flat in nominal terms.
30
The length of retirement the withdrawal figure assumes — a 30-year level annuity at the same return rate.

Worked example

Age 35 retiring at 65, 40,000 saved, adding 12,000 a year, 6 percent return, 2.5 percent inflation.

About 1.24 million nominal, roughly 589,000 in today’s money, supporting around 42,786 a year for 30 years.

Read the inflation-adjusted figure, not the headline

The 1.24 million is in the currency of 30 years from now and is not comparable to any cost you know today. The 589,000 is, and it is the number to judge against your expected spending. The gap between the two — more than half the balance — is the whole reason this second line exists, and ignoring it is how long-range projections produce false comfort.

Contributions do not rise with inflation here

The annual contribution stays flat in nominal terms for the full period, so its real value shrinks every year. If you expect to increase what you save in line with earnings, this projection understates the outcome, potentially by a lot over 30 years. A rough way to compensate is to run the calculation with a return rate reduced by inflation and treat all the figures as being in today’s money throughout.

The withdrawal figure is an annuity, not a rule

It answers one specific question: what level annual amount would exactly exhaust the adjusted balance over 30 years at the same return rate. It assumes you keep earning that return in retirement, that the withdrawal never changes, and that you need the money for exactly 30 years. Real retirement spending is uneven, real returns vary, and sequence matters enormously — a poor few years early does far more damage than the same years later.

A steady return is the model’s biggest simplification

Applying an identical rate every year for 30 years is arithmetically convenient and unlike any real market. The same average with volatility around it produces a different ending balance, and usually a lower one. Treat this as a planning skeleton: run it at two or three return assumptions, plan against the pessimistic one, and revisit every few years with actual balances rather than trusting a projection made decades earlier.

Common questions

How much do I need to retire?

That depends on what you intend to spend, which is not something a projection can supply. What this tool does is the other half of the question: it shows what your current savings and contributions are likely to become, in both nominal and inflation-adjusted terms, so you can compare it against a spending figure you decide separately.

Why are the two balance figures so different?

One is nominal and one is in today’s money. At 2.5 percent inflation over 30 years, prices roughly double, so a future balance buys about half what the same number would buy now. Comparing the nominal figure against present-day costs is the classic mistake in retirement planning.

What return rate should I assume?

Any figure is an assumption rather than a fact, and the projection is very sensitive to it over long horizons. Running the calculation at a pessimistic, a moderate and an optimistic rate gives a range, and planning against the low end is more robust than planning against a single central estimate.

How is the annual withdrawal calculated?

As a level 30-year annuity on the inflation-adjusted balance at the same return rate. It is the constant annual amount that would exactly exhaust the balance over 30 years, assuming the return continues and the withdrawal never changes — none of which is guaranteed in practice.

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