Retirement Calculator

Planning for retirement can be a daunting task, but with a reliable retirement calculator, you can estimate how much you need to save to achieve your financial goals. This retirement calculator will help you determine the amount you need to save monthly to ensure a comfortable retirement. Simply input your current age, retirement age, expected annual return on investment, current savings, and desired retirement income, and the calculator will do the rest.

Example Calculation

Let's consider an example to illustrate how the retirement calculator works.

• Current Age: 30 years old
• Retirement Age: 65 years old
• Expected Annual Return on Investment: 6%
• Current Savings: $50,000
• Desired Annual Retirement Income: $60,000

Steps to Calculate Monthly Savings

1. Calculate the number of years to retirement:
   Years to Retirement = Retirement Age - Current Age
   Years to Retirement = 65 - 30 = 35
2. Calculate the future value of current savings:
   Future Value Factor = (1 + Annual Return) ^ Years to Retirement
   Future Value Factor = (1 + 0.06) ^ 35 ≈ 7.686
   Future Savings = Current Savings * Future Value Factor
   Future Savings = 50,000 * 7.686 ≈ 384,300
3. Calculate the required savings at retirement:
   Assume a retirement period of 20 years.
   Annual Withdrawal Factor = (1 - (1 + Annual Return) ^ -Retirement Period) / Annual Return
   Annual Withdrawal Factor = (1 - (1 + 0.06) ^ -20) / 0.06 ≈ 11.470
   Required Savings = Desired Annual Income * Annual Withdrawal Factor
   Required Savings = 60,000 * 11.470 ≈ 688,200
4. Calculate the additional savings needed:
   Additional Savings Needed = Required Savings - Future Savings
   Additional Savings Needed = 688,200 - 384,300 ≈ 303,900
5. Calculate the monthly savings needed:
   Monthly Savings = Additional Savings Needed / (Years to Retirement * 12)
   Monthly Savings = 303,900 / (35 * 12) ≈ 724

Conclusion: To achieve a desired annual retirement income of $60,000, you need to save approximately $724 per month from now until retirement.