A retirement calculator answers one question: if you keep saving the way you do now, how much will you have when you stop working? It compounds your current balance and every future monthly contribution at an expected return up to your retirement age. The headline formula is FV = P(1+i)ⁿ + PMT·((1+i)ⁿ−1)/i. The single biggest lever is time — because growth compounds, the years furthest in the future add the most, which is why starting early beats saving more later.
Reviewed: June 20, 2026 · Author: Naveen P N, Founder — AI Calculator · Verified against: future-value of an annuity. Not financial advice.
The retirement equations
The first term grows your existing balance; the second is the future value of an annuity — the running total of all monthly deposits, each compounded for the months remaining. Subtract everything you contributed (P + PMT·n) to isolate the compound growth. The 4% rule then translates a nest egg into a rough sustainable income: 4% of the balance per year, split into months. Because i is monthly, always convert an annual return by dividing by 12, and n counts months, not years.
Worked example — saving from 30 to 65
Scenario: Age 30, retiring at 65, 20,000 saved today, 500/month, 7% expected return.
The projected nest egg is about 1,130,650. Of that, you contributed 230,000 (20,000 plus 500 × 420 months) and compound growth supplied roughly 900,650 — nearly four-fifths of the total. Under the 4% rule that supports about 45,200 a year, or 3,769 a month. Now notice the horizon effect: the same plan run for 25 years instead of 35 lands at about 520,000, while 45 years reaches 2,358,767. The final decade alone more than doubles the result, which is the whole case for starting as early as you can.
Frequently Asked Questions
FV = P(1+i)ⁿ + PMT((1+i)ⁿ−1)/i. 20,000 + 500/mo at 7% from 30→65 ≈ 1.13M.
Compounding rewards time: 25 yr ≈ 520k, 35 yr ≈ 1.13M, 45 yr ≈ 2.36M for the same plan.
Withdraw ~4%/yr of the nest egg. 1.13M ≈ 45,200/yr ≈ 3,769/mo. A guideline, not a guarantee.
Nominal gives future dollars. Use a real return (nominal − inflation) for today's buying power.
Add the match to your monthly deposit; subtract fees from the return (e.g. 6.5% for a 0.5% fee).