Plan your retirement savings and estimate your future monthly income
Projects the balance you will have at retirement by growing your existing savings and adding the future value of every planned contribution. Both parts compound, but early contributions carry far more weight than later ones.
FV = PV × (1 + r)^n + PMT × ((1 + r)^n − 1) / r
PVcurrent retirement savingsPMTcontribution per periodrexpected return per period (annual return ÷ 12 for monthly)nnumber of periods until retirementA common rule of thumb is to replace 70-80% of your pre-retirement income. In dollar terms, aim for 25× your annual expenses. The "4% rule" suggests you can safely withdraw 4% per year.
A conservative long-term real (after-inflation) return for a diversified portfolio is 5-7%. Younger investors with stock-heavy portfolios may use 7-8%; those near retirement should use 3-5%.
Yes, but be conservative. Estimate Social Security from your official statement at ssa.gov. It typically replaces 30-40% of pre-retirement income for middle-class earners.
Multiply your expected annual retirement spending by 25 to find your target nest egg. $50,000 per year in spending means you need roughly $1.25M invested.