Retirement / 401(k) Savings Calculator

How This Calculator Works

A retirement calculator projects how savings grow over time using compound interest, working forward from today’s contributions or backward from a target balance or withdrawal need. Retirement planning is really four different questions, so this calculator covers all four — pick the one that matches what you’re trying to figure out:

• How much will I have? Given what you’re saving now, project your account balance at retirement.
• How much should I save? Given a target balance, solve for the monthly contribution that gets you there.
• How much can I withdraw? Given your nest egg and how long it needs to last, find a level monthly withdrawal that spends it down to exactly zero over that time — not a guess, but the precise amount.
• How long will my money last? Given your nest egg and a spending amount you choose, find out how many years it lasts.

The first two are accumulation questions (a balance growing with contributions); the last two are drawdown questions (a balance shrinking as you spend it, while what’s left keeps earning a return). Switching between them keeps your last-entered numbers for each, so you can go back and forth without re-typing anything.

The Formulas

How much will I have? and how much should I save? both use the standard future value of an annuity formula (the same math behind the Compound Interest Calculator) — one solves for the ending balance, the other rearranges the same formula to solve for the required monthly contribution instead:

$$\vE{\text{Balance}} = \vA{P}(1 + \vB{r})^{\vC{n}} + \vD{PMT} \times \left[\frac{(1 + \vB{r})^{\vC{n}} - 1}{\vB{r}}\right]$$

where $\vA{P}$ is the starting balance, $\vD{PMT}$ is the monthly contribution (yours plus any employer match), $\vB{r}$ is the monthly rate of return, and $\vC{n}$ is the number of months.

How much can I withdraw? and how long will my money last? are mathematically identical to a loan being paid off — think of your retirement balance as the “loan,” and each withdrawal as a “payment” against it. The same amortization formula that computes a mortgage payment computes a sustainable withdrawal:

$$\text{Withdrawal} = \vE{\text{Balance}} \times \frac{\vB{r}(1 + \vB{r})^{\vC{n}}}{(1 + \vB{r})^{\vC{n}} - 1}$$

“How long will my money last?” rearranges this same relationship to solve for $\vC{n}$ (the number of months) instead, given a withdrawal amount you choose. If your withdrawal doesn’t exceed what the balance is projected to earn in interest each month, the balance never actually reaches zero — this calculator reports that as lasting indefinitely rather than showing a misleadingly large number of years.

The withdrawal mode also shows the widely-cited “4% rule” (4% of the balance per year) for comparison — a well-known rule of thumb, not a guarantee, since real portfolios and lifespans vary.

Worked Example

How much will I have? Starting with a $20,000 balance, contributing $500/month, with a $250/month employer match, an expected 7% average annual return, over 25 years:

1. Growth on your starting balance alone: about $114,508.
2. Growth on your $750/month combined contributions: about $607,554.
3. Projected balance at retirement: $722,062.
4. Of that, you contributed $150,000 and your employer contributed $75,000 — the remaining $477,062 came from investment growth.

How much can I withdraw? With a $1,000,000 balance, an expected 5% annual return in retirement, over 30 years: a level monthly withdrawal of about $5,368 exactly depletes the balance by the end of year 30 — higher than the “4% rule” estimate of $3,333/month, since this figure accounts for the balance continuing to earn a return throughout the drawdown, not just at the start.

Common Mistakes

• Projecting with a nominal return and ignoring inflation. A 7% average return sounds generous, but prices rise too — the real, inflation-adjusted growth in purchasing power is meaningfully lower than the headline percentage.
• Assuming one fixed annual return every single year. Real markets don’t return the same percentage every year — a single steady rate is a useful simplification for a long-run estimate, not a promise of what any specific year will do.
• Not increasing contributions as income grows. Keeping a fixed dollar contribution for decades means it shrinks as a share of a rising salary — revisiting the contribution amount periodically (e.g. after each raise) keeps the projection realistic.
• Forgetting Social Security or a pension when estimating “how much can I withdraw.” This calculator models withdrawals from the modeled balance alone — other guaranteed income sources in retirement would reduce how much needs to come from savings each month.