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MasterMath

Retirement Calculator

Saving 300 a month from 35 to 65 at 6% builds 391,693 — but that is 161,372 in today's money, and it pays about 1,040 a month in today's terms. Both numbers matter.

Currency and number format for

You will have at retirement

—

You will have at retirement—
That, in today's money—
Monthly income in retirement—
That income, in today's money—
Out of your own pocket—
What compounding contributes—

How this was worked out

    Indicative result. This projects one constant return and one constant inflation rate. Real markets deliver neither, so treat the figure as a direction, not a forecast.

    The formula

    FV = current savings compounded + monthly payments compounded, then discounted by inflation

    Where it comes from

    The projection grows what you have and what you add, then divides the result by inflation to show what it will actually buy. That second step is the one people skip, and it is the one that changes the decision.

    How to work it out by hand

    1. Grow what you have already saved to retirement age
    2. Add the compounded value of every monthly payment
    3. Divide by the inflation factor to get today's money
    4. Spread the total over the years it has to last

    What is worth knowing

    Two thirds of the final figure here comes from compounding rather than from your own payments, and that share depends almost entirely on how early you start. The same 300 a month begun at 45 instead of 35 produces less than half the pot. The inflation column is the honest one: 391,693 sounds transformative and 161,372 does not, but they are the same money. Note also that spreading the pot evenly over 25 years assumes it stops earning; the widely used 4% rule assumes it keeps working and gives a lower but potentially permanent income, which this calculator also shows.

    Frequently asked questions

    What return should I assume?

    A diversified stock portfolio has historically returned around 7% a year before inflation over long periods, but never smoothly. Assuming 5 to 6% is a reasonable planning figure.

    Why show the figure in today's money?

    Because that is what tells you whether it is enough. At 3% inflation, money loses well over half its purchasing power in 30 years.

    What is the 4% rule?

    A rule of thumb that withdrawing 4% of the pot in the first year, then adjusting for inflation, has historically lasted 30 years. It gives a lower income than simply dividing the pot, but does not run out on a fixed date.

    Does it matter that much when I start?

    More than anything else here. Money invested at 35 has thirty years to compound; money invested at 55 has ten. The first decade of saving usually does more work than the last two.