Retirement Calculator - Plan Your Pension and Savings
Plan your retirement online. Calculate the sustainable monthly income from your savings or find out how much you need to save per month.
What is the purpose?
This retirement planner helps you estimate your future accumulated savings and calculate either the monthly retirement income you can sustain or the monthly contributions required to reach your target retirement nest egg.
Formula Used
Retirement planning consists of two main phases:
- Accumulation Phase: The accumulated capital (
C_{accumulated}) is calculated by compounding the current balance and monthly contributions (PMT) overnmonths:
C_{accumulated} = C_{current} × (1 + r_{pre})n + PMT × (1 + r_{pre})n - 1r_{pre}
- Distribution Phase (Sustainable Income): The monthly sustainable payout (
PMT_{sustainable}) is computed to deplete the accumulated capital overmmonths of retirement using the post-retirement rate (r_{post}):
PMT_{sustainable} = C_{accumulated} × r_{post} × (1 + r_{post})m(1 + r_{post})m - 1
*(Note: Equivalent monthly interest rates are calculated from the annual rate R by: r = (1 + R)1/12 - 1)*
How to interpret the result?
The calculator outputs:
- Sustainable Monthly Income or Required Contribution: Shows how much you can withdraw monthly, or how much you must save depending on your selected mode.
- Accumulated Capital: The total estimated nest egg at retirement age.
- Total Contributed: The sum of all direct payments made.
- Total Interest Earned: The compounding returns generated over both accumulation and retirement phases.
Practical Examples
If you are 30, want to retire at 65, have a life expectancy of 85, and start with $10,000.00:
- Saving $500.00 per month with an 8% pre-retirement and 5% post-retirement annual return:
- Your accumulated capital at 65 will be $1,139,734.51.
- You can withdraw a sustainable monthly income of $7,747.38 until age 85.
- Total interest earned will be $1,639,371.20.
Usage Tips
- Start as early as possible. Time is the most critical driver for compound interest in the accumulation phase.
- Set return rates conservatively. During retirement, prefer low-risk investments with lower expected returns.
- Factor in projected inflation to evaluate your future savings in terms of current purchasing power.
Important Observations
Calculations assume constant rates of return. Real-world returns will vary. Taxes (such as income tax) and investment fees are not deducted automatically in this simulation.