Planning for Your "Nest Egg"
Retirement planning is about determining how much money you need to save today to live comfortably tomorrow. This calculator estimates the size of your "Nest Egg"—the total sum of money you will have accumulated by the time you stop working.
[Image of retirement nest egg concept]The Power of Time
The most critical variable in retirement planning is Time. The gap between your "Current Age" and "Retirement Age" determines how long your money has to compound. Starting 5 years earlier can sometimes double your final amount due to the exponential nature of compound interest.
Future Value = Future Value (Current Savings) + Future Value (Monthly Annuity)
Definition of Terms
Current Savings
The total amount you have already saved in IRAs, 401(k)s, or savings accounts dedicated to retirement.
Monthly Contribution
How much you deposit into these accounts every month. This includes money from your paycheck and any employer matching.
Annual Rate of Return
The estimated yearly growth of your investments. Historically, the stock market (adjusted for inflation) returns about 7%. Conservative portfolios may return 4-5%.
Step-by-Step Instructions
- Enter Ages: Input how old you are now and at what age you plan to retire.
- Input Savings: Enter the lump sum you currently have invested.
- Set Contribution: Determine a realistic monthly saving amount.
- Estimate Return: Choose a growth rate. 7% is a standard "moderate" assumption.
- Analyze: The chart shows your wealth accumulation curve. Notice how the curve gets steeper in the later years—that is the power of compounding.