Retirement Calculator
Balance at Key Milestones
| Age | Balance | Contributions to Date | Growth to Date |
|---|
Are You on Track to Retire When You Want?
Most people don't know the answer to that question — not because they haven't thought about it, but because the math feels complicated. This calculator does the work for you. Enter a few numbers and you'll see exactly where you're headed, how much your investments will grow, and whether your projected income will cover what you plan to spend.
How to Use This Calculator
Enter your current age and retirement age, your current savings balance, how much you contribute monthly, the annual return you expect on investments, and your estimated monthly spending in retirement. The calculator projects your nest egg at retirement, your estimated monthly income using the 4% rule, and a milestone table showing your balance at regular intervals along the way.
How the Math Works
Your retirement nest egg comes from two streams that both compound over time. The first is your existing savings growing through investment returns:
The second is the future value of all your monthly contributions:
Where r is the monthly rate (annual rate ÷ 12) and n is total months. Both streams are added together to get your projected nest egg. Monthly retirement income is then estimated using the 4% rule: nest egg × 4% ÷ 12.
Real-World Example
Using the calculator's default values — age 35, retiring at 65, $50,000 saved, $500/month contributions, 7% annual return:
- Years to retirement: 30
- Current savings grows to: ~$405,800
- Contributions grow to: ~$610,000
- Total nest egg: ~$1,016,000
- Total contributions made: $180,000
- Investment growth: ~$786,000 (77% of the nest egg)
- Estimated monthly income (4% rule): ~$3,387
- Planned monthly spending: $4,000
There's a gap of about $613/month between projected income and planned spending. This is a very common and solvable situation — it means either increasing monthly contributions, retiring slightly later, adjusting spending expectations, or relying on additional income sources like Social Security or CPP. Try adjusting the inputs to see how quickly that gap closes.
The 4% Rule — and Its Limits
The 4% rule comes from the Trinity Study (1998), which found that a portfolio invested in a mix of stocks and bonds could support annual withdrawals of 4% for at least 30 years through most historical market conditions. It's a useful rule of thumb — not a guarantee.
The rule has meaningful limitations worth knowing:
- It assumes a 30-year retirement — if you retire at 55 and live to 95, you need a more conservative withdrawal rate, closer to 3–3.5%.
- It doesn't account for taxes — withdrawals from registered or tax-deferred accounts will be taxed as income, reducing what you actually take home.
- It doesn't include inflation adjustment — $4,000/month today will have less purchasing power in 30 years. A more complete plan factors in 2–3% annual inflation.
- It assumes you stay invested — panic-selling during market downturns is the main way the 4% rule fails in practice.
The Three Sources of Your Nest Egg
Look at the chart in the results — for most people, the breakdown is surprising. Over a 30-year period at 7%, investment growth typically accounts for 70–80% of the final balance. Your starting savings and contributions are the seeds; compound growth is what makes them a forest. This is why the two most powerful levers in retirement planning are starting early and staying invested — not necessarily saving more.
Tips for Getting on Track
- Start now, even small — $100/month at age 25 produces roughly the same nest egg as $200/month starting at 35. Time is the variable you can't buy back.
- Capture employer matches first — an employer match is an immediate 50–100% return on your contribution. Always contribute at least enough to get the full match before doing anything else with that money.
- Use tax-advantaged accounts — RRSPs, TFSAs, 401(k)s, and IRAs let your money compound without being reduced by taxes each year. The difference over 30 years is enormous.
- Increase contributions with raises — when your income goes up, increase your retirement contribution before the lifestyle inflation sets in. Even 1–2% more per year adds up significantly.
- Run this calculator annually — your situation changes. Markets go up and down, contributions change, plans shift. A yearly check-in keeps you calibrated.
Frequently Asked Questions
How much do I need to retire?
A common benchmark is 25× your expected annual spending — which is mathematically equivalent to the 4% rule. If you plan to spend $48,000/year in retirement ($4,000/month), you'd target a nest egg of $1,200,000. This is a starting point, not a finish line — your actual number depends on your health, longevity, other income sources, and lifestyle.
What annual return rate should I use?
For a diversified equity portfolio, 7% is a commonly used figure representing the approximate historical real return of broad stock market index funds after inflation. For a mixed stock-and-bond portfolio, 5–6% is more conservative and appropriate as you approach retirement. Use a lower number than you expect — you can always retire with more than planned, but not less.
What if my projected income is less than my planned spending?
You have four levers: save more each month, retire later, plan to spend less, or count on additional income (government pension, part-time work, rental income). Often a small increase in monthly contributions — combined with retiring just 2–3 years later — closes the gap entirely. Use the calculator to experiment with each option.
Does this calculator account for inflation?
Not directly. The simplest way to handle inflation is to use a real return rate (nominal return minus expected inflation). If you expect 9% nominal returns and 2.5% inflation, use 6.5% in the calculator. Your projected nest egg will then be expressed in today's purchasing power rather than future nominal dollars.
When is it too late to start saving for retirement?
It's never too late — though the math gets harder the longer you wait. Someone starting at 50 with 15 years to retirement can still build a meaningful nest egg, especially with higher income and lower expenses that often come later in a career. Starting late means contributing more, accepting more investment risk, or adjusting retirement age and spending plans. The worst move is deciding it's hopeless and doing nothing.