How to project a retirement balance
Enter what you have saved now, what you add each month, the annual return you expect, and how many years remain until you retire. The tool compounds the existing balance monthly and adds the contribution stream on top.
The two lines it returns, the projected balance and the total contributed, are worth reading together. The difference between them is the compounding, and on a 30-year horizon it is usually larger than everything you paid in.
- Enter what you have already saved in the Current savings field. It starts at 20000.
- Enter your monthly saving, employer match included, in the Monthly contribution field. It starts at 500.
- Enter your expected annual return in the Annual return (%) field. It starts at 6.
- Enter your horizon in the Years until retirement field. It starts at 30.
- Read the Projected balance line, then re-run with the return reduced by your inflation assumption to see the figure in today's money.