About the Retirement Savings Calculator
Compound growth is often described as the most powerful force in personal finance, because returns earned in early years continue generating their own returns for decades. Small differences in contribution amount or start date can compound into large differences in an eventual retirement balance.
This calculator projects account growth using monthly compounding at a constant assumed annual return — a simplification of real markets, which fluctuate year to year, but a standard and useful way to compare different savings scenarios and contribution levels.
Frequently Asked Questions
Does this account for inflation?
No — the projected balance is in today's dollars terms only if you separately adjust the assumed return downward for inflation (a common approach is using a 4-5% "real" return instead of a nominal 7-10% return).
What return rate should I use?
Many long-term projections use 6-8% as a rough historical average for a diversified stock portfolio, though actual returns vary significantly year to year and are never guaranteed.
How much does starting five years earlier matter?
Substantially — because of compounding, contributions made in your 20s and 30s have far more time to grow than the same contributions made later, even if the total amount contributed is similar.