Use the projected balance and income gap to test assumptions. The result is before tax and inflation and does not establish a safe withdrawal strategy.
Separate accumulation from retirement income
Before retirement, the calculator grows current savings and monthly contributions under one constant return assumption. At retirement, it applies the entered withdrawal rate to the projected balance.
Other monthly income can represent an estimate for Social Security, a pension, or another dependable source. Obtain a personalized benefit estimate before relying on that amount.
- Test a later or earlier retirement age.
- Compare different monthly contribution levels.
- Use more than one return and withdrawal-rate scenario.
Account for purchasing power
The displayed balance and monthly income are nominal future dollars. Inflation can substantially reduce what those amounts buy by retirement.
A fuller plan should compare future spending, health costs, taxes, housing, and expected benefits in the same dollar basis.
Important limits
This simplified projection does not model taxes, inflation, employer matching, contribution limits, required minimum distributions, market volatility, sequence risk, lifespan, or benefit eligibility.
A withdrawal rate is not guaranteed to preserve assets. Retirement decisions may benefit from personalized professional guidance.
The formula used
Projected balance = current savings growth + future value of monthly contributionsPortfolio monthly income is the projected balance multiplied by the entered annual withdrawal rate and divided by 12. Other monthly income is then added for comparison with the goal.
Example: planning from age 35 to 67
A 35-year-old with $50,000 saved who contributes $750 monthly through age 67 can test a 6% return scenario. The tool projects a balance, applies the entered planning withdrawal rate, adds an estimated Social Security or pension amount, and shows any gap from the desired monthly income.
Sources and further reading
We use primary educational sources to check terminology and explain how the calculation fits into real financial decisions.
U.S. Department of Labor — Savings Fitness↗Social Security Administration — Retirement Planner↗