How the projection works
The calculator starts with your current savings and, for every month until retirement, adds one month of investment growth and then your contribution. It then divides the final figure by (1 + inflation) for each year to show what it might be worth in today's money. Two numbers matter: the nominal balance, which is what your account statement will show, and the inflation-adjusted balance, which reflects what it will actually buy.
Example
A 30-year-old with $25,000 saved who contributes $500 a month until 65, earning 6.5% a year, could reach about $1.04 million. With 2.5% inflation, that is worth roughly $439,000 in today's dollars. Using the 4% rule of thumb, that supports about $17,600 a year in today's money before other income such as Social Security.
What the 4% rule means
The 4% rule is a rough guide: withdraw 4% of your savings in the first year of retirement and adjust that amount for inflation afterwards. It grew out of historical analysis of U.S. markets over 30-year periods. It is not a guarantee, and people retiring earlier, or in years of poor returns, may want a lower withdrawal rate.
Making the projection more realistic
- Use a cautious return. Actual returns vary a lot from year to year, and fees reduce them.
- Raise contributions over time. This tool keeps them flat; in reality many people increase them with their salary, which improves the outcome.
- Include employer matching. If your employer matches contributions, add that to your monthly amount.
- Consider taxes. Withdrawals from many retirement accounts are taxable, which is not modeled here.
This is an educational estimate and not personalised financial advice. A fee-only financial planner can build a plan around your situation.