Retirement Savings Calculator
Projected pot at retirement
$1,188,181
About $500,665 in today’s money
- You put in$235,000
- Investment growth$953,181
The second figure is the one that matters: $500,665 in today’s money is what the pot would actually buy, after inflation. Steady returns are assumed, and tax is not modelled.
Projecting a pot, and then deflating it
Retirement projections are usually quoted as one big number, and the big number is misleading, because it is expressed in the money of a year that has not happened yet. This calculator shows both figures: the nominal balance you would hold at retirement, and what that balance is worth in today’s money once inflation has been taken out of it. The second number is the one to plan against.
It is aimed at anyone with a pension, a 401(k), an IRA or a plain investment account being fed monthly — the arithmetic is the same wherever the wrapper is.
A worked example: 30 to 65
A 30-year-old with $25,000 saved, adding $500 a month, assuming a 7% annual return and 2.5% inflation, retires at 65 with a projected $1,188,181.10. Of that, $235,000 is money paid in — the original $25,000 plus 420 monthly contributions — and $953,181.10 is growth.
Then apply inflation. Over 35 years at 2.5% a year, prices multiply by 1.025^35 = 2.3732, so that $1.19 million buys what $500,665.14 buys today. The pot is still a good outcome; it is not a million dollars in any sense you can spend.
Both figures move sharply with the assumed return, which is why the number to test is the return rather than the contribution. Run it at 5% and again at 7% before believing either.
How the projection works
The balance compounds monthly: each month it is multiplied by (1 + annual return ÷ 12), then the monthly contribution is added at the end of the month. That runs for (retirement age − current age) × 12 months.
The real-terms figure is the nominal balance divided by (1 + inflation)^years. This is a deflator, not a return adjustment — it converts future dollars into today’s dollars rather than reducing the growth rate. Setting inflation to zero makes the two figures identical, which is a quick way to see exactly how much of the headline number is currency drift.
What a straight-line projection cannot capture
A constant return every month for 35 years is not how markets behave, and the difference is not merely cosmetic. Sequence-of-returns risk means the order of good and bad years matters: a poor decade at the end, when the balance is large, damages the outcome far more than the same decade at the start. A single average rate hides that entirely.
Also outside the model: tax, in every form — contributions relieved at source, growth taxed or sheltered, withdrawals taxed as income — along with employer matching, fund fees charged as a percentage of the balance, state or public pensions, contribution limits, and any increase in your contribution as your salary rises. Real plans also rarely stay 100% in growth assets to the last day; most shift toward bonds near retirement, which lowers the expected return in exactly the years this model assumes it stays flat.
Retirement projection questions
What inflation rate should I use?
Most developed-economy central banks target around 2%, and long-run realised inflation has been a little above that. Using 2.5% is a reasonable middle. The point is not to predict it precisely but to stop reading a future balance as though it were spending money today.
How much is the pot actually worth as income?
A common rule of thumb is that around 4% of the starting balance can be withdrawn in the first year and then adjusted for inflation, with a reasonable chance of lasting 30 years. On the real-terms $500,665 above, that is roughly $20,000 a year in today’s money — worth knowing before the seven-figure headline sets an expectation.
Does starting ten years earlier really matter that much?
Yes, and it is the largest single lever here. Contributions made early get compounded for the whole run, so the first decade of saving typically contributes more to the final balance than the last decade does, despite being identical money.