Plan your financial future by estimating your retirement nest egg based on current savings and contributions.
Retirement might seem far away, but the steps you take today determine the quality of your life tomorrow. The "magic" of compound interest needs time to work, which means starting early is the single most effective strategy for building wealth. Our Retirement Savings Calculator helps you project your future nest egg based on your current habits.
Consider two investors, Sarah and Mike. Sarah starts saving $500/month at age 25. Mike waits until age 35 to start saving the same amount. Assuming a 7% return, by age 65:
Mike contributed only $60,000 less than Sarah (10 years x $6,000/yr), but he ended up with half the money. That is the cost of waiting.
Financial planners often cite the 4% Rule. This rule suggests that you can withdraw 4% of your portfolio in the first year of retirement and adjust that amount for inflation in subsequent years, with a high probability that your money will last 30 years.
Example:
If you want an annual retirement income of $60,000 (excluding Social Security):
$60,000 ÷ 0.04 = $1,500,000 Target Portfolio
The S&P 500 has historically returned about 10% annually. However, adjusted for inflation, 7% is a common figure used for projections. If you are conservative, use 5-6%.
You can retire whenever your passive income (from investments) exceeds your expenses. This is the core concept of the FIRE (Financial Independence, Retire Early) movement.