How does compound growth help my retirement savings?

Compound growth means your returns earn their own returns. Over decades, this snowball effect dominates: even modest monthly contributions can grow into a substantial nest egg because each year's gains are reinvested and compound on top of previous gains.

What annual return should I assume?

Historically, a diversified stock portfolio has returned roughly 7-10% per year before inflation. A conservative estimate of 6-7% accounts for a blended portfolio of stocks and bonds. The right number depends on your asset allocation and risk tolerance.

Does this calculator account for inflation?

No — the result is in nominal (today's) dollars. To approximate real purchasing power, subtract the expected inflation rate (typically 2-3%) from your assumed return. For example, 7% nominal minus 2.5% inflation gives about 4.5% real return.

Is starting early really that important?

Yes. A 25-year-old investing $300/month at 7% will have more at 65 than a 35-year-old investing $600/month at the same rate. The extra decade of compounding is extraordinarily powerful — it effectively doubles the impact of each dollar saved.

Does this include employer contributions or tax benefits?

No — enter only your personal contributions. If your employer matches a percentage, add that to your monthly contribution. Tax benefits (e.g., 401k, IRA, ISA) affect your after-tax return; this calculator shows pre-tax growth. These vehicles follow accumulation and withdrawal rules that vary by jurisdiction and are not modeled here.

FINFinancial

Retirement Calculator

Project how much you will have saved by retirement based on your current savings, monthly contributions, and expected investment returns. See the power of compound growth over decades of saving.

Currency

Current Age

years

Retirement Age

years

Current Savings

Monthly Contribution

Expected Annual Return

Try an example

Enter values above to see results

How It Works

Formula

\text{FV} = \text{PV} \times \left(1 + \frac{r}{12}\right)^{n} + \text{PMT} \times \frac{\left(1 + \frac{r}{12}\right)^{n} - 1}{r / 12}

Where

$\text{FV}$: Future value of your savings at retirement
$\text{PV}$: Current savings balance
$\text{PMT}$: Monthly contribution
$r$: Expected annual return rate (decimal)
$n$: Number of months until retirement — years × 12

Enter your current age, target retirement age, current savings balance, monthly contribution, and expected annual return. The calculator compounds your existing savings and adds the future value of your monthly contributions to project your total retirement balance.