Retirement planning involves estimating how much money you need to sustain your desired lifestyle after you stop working. The earlier you start saving and investing, the more time compound growth has to work in your favor, making even modest monthly contributions powerful over decades.

The key formula uses the future value of your current savings plus the future value of an annuity representing your monthly contributions. Both grow at your expected rate of return. Inflation is then factored in to express results in today's purchasing power, giving you a realistic picture of what your savings can actually buy in retirement.

Financial planners often suggest targeting a retirement portfolio that can replace 70% to 80% of your pre-retirement income. The 4% rule is a widely cited guideline suggesting you can withdraw 4% of your portfolio annually with a low risk of running out of money over a 30-year retirement. This calculator helps you test that assumption against your own numbers.