Example Data Table
These sample values help you understand what to enter. Replace them with your own numbers to get a personalized projection.
| Field | Example Value | Meaning |
|---|---|---|
| Current age | 30 | Your age today. |
| Retirement age | 65 | When you want to stop full-time work. |
| Current savings | 25,000 | Investable balance across accounts. |
| Monthly contribution | 500 | How much you add each month. |
| Desired annual spending (today) | 40,000 | Target yearly lifestyle budget in today’s terms. |
Formula Used
- Retirement-year spending (nominal): Sret = Stoday × (1 + i)Y, where i is inflation and Y is years to retirement.
- Tax gross-up (optional): W1 = Sret ÷ (1 − t), where t is the withdrawal tax rate. If unchecked, W1 = Sret.
- Required nest egg (inflation-growing annuity PV): PV = W1 × (1 − ((1+i)/(1+r))N) ÷ (r − i), where r is post-retirement return and N is retirement years.
- Safe withdrawal method (optional): Target = W1 ÷ SWR.
- Savings projection (monthly compounding): balance grows by a monthly rate and adds monthly contributions, with an annual step-up if selected.
How to Use This Calculator
- Enter your ages and expected retirement duration.
- Add current savings, monthly contributions, and any annual step-up.
- Set return and inflation assumptions that match your risk level.
- Enter your desired annual spending in today’s terms.
- Pick a target method, then press Calculate Nest Egg.
- Review the gap and export the report if needed.
Target Meaning
A nest egg target estimates the portfolio value needed at retirement to fund planned spending. The calculator converts today’s spending goal into retirement year currency using inflation, then sizes the portfolio so withdrawals can last for the selected duration. Returns, inflation, and retirement length interact, so small assumption changes can shift the target materially. Use the gap figure to set savings priorities and monitor progress regularly across different market conditions.
Savings Inputs
Inputs on savings growth describe how your balance may evolve before retirement. Current savings set the starting point, monthly contributions add consistently, and the annual contribution increase models raises or improved saving discipline. One time deposits or withdrawals capture events such as bonuses, home repairs, or education costs. Pre retirement return drives compounding, so consider fees and volatility. The projection reports nominal balances and inflation adjusted balances for clear comparison.
Inflation Taxes
Retirement spending is entered in today dollars, but withdrawals occur in the future after prices rise. Inflation increases the first year withdrawal amount and also grows withdrawals through retirement in the annuity method. If your spending goal is after tax, the tool can gross up withdrawals using an assumed tax rate so net spending matches your plan. Review the first year retirement spending value to confirm your assumptions remain realistic.
Method Comparison
The calculator provides two ways to estimate the required portfolio at retirement. The inflation growing annuity approach discounts a stream of withdrawals over the retirement horizon using post retirement return and inflation, producing a present value target. The safe withdrawal rate approach divides the first year withdrawal by a chosen percentage, such as 4%, creating a simpler rule. Compare results to understand sensitivity, and keep an extra buffer for uncertainty.
Projection Actions
Use the projection table to evaluate options rather than chasing a single number. If you see a shortfall, try increasing monthly contributions, extending the retirement age, or lowering planned spending to reduce the target. If you see a surplus, explore earlier retirement or lower risk allocations. One time events help stress test large purchases. Export CSV for deeper analysis and export PDF for sharing with trusted advisors and family members.
FAQs
1) What return rate should I enter?
Use an expected long term nominal return that matches your portfolio risk and fees. Many people start with conservative ranges, then test several scenarios to understand sensitivity.
2) Why does the table show “today dollars”?
“Today dollars” divides future balances by cumulative inflation. It helps you compare projected purchasing power with your current lifestyle budget without mentally adjusting for price changes.
3) What is the difference between annuity and safe withdrawal targets?
The annuity option values a withdrawal stream over a set retirement duration. The safe withdrawal option uses a single percentage rule. They can differ because assumptions about longevity and market risk differ.
4) How does the annual contribution increase work?
The monthly contribution is stepped up once per year by the selected percentage. This models raises or planned saving increases while keeping inputs simple and transparent.
5) How are one time deposits or withdrawals applied?
A one time event is added or subtracted at the end of the chosen year in the projection. Use it to model bonuses, big purchases, or education expenses.
6) Does the calculator include fees or sequence of returns risk?
No. It uses smooth average returns for clarity. You can approximate fees by lowering the return rates, and you can add a buffer by targeting a higher required nest egg.