How This Projection Works
This calculator simulates your account growing month by month: each month, your existing balance earns the monthly equivalent of your expected annual return, and then your contribution is added. Over many years, the gap between "money you put in" and "money your investments earned" tends to widen dramatically — for many long-term savers, growth eventually outpaces contributions entirely.
The 4% Rule, Briefly
The 4% rule is a rough guideline from retirement research suggesting that withdrawing about 4% of your portfolio in the first year of retirement (and adjusting for inflation thereafter) has historically had a good chance of lasting 30 years without running out. It's a starting point for discussion, not a guarantee — actual safe withdrawal rates depend on market conditions, your time horizon, asset allocation, and flexibility to adjust spending in down years. Some planners now suggest more conservative rates (3–3.5%) for very long retirements.
Why "Years Until Retirement" Matters So Much
Because of compounding, the number of years your money has to grow matters more than almost any other input in this calculator. Delaying retirement by even 5 years — or starting to save 5 years earlier — can change the projected balance by a much larger percentage than a modest change in contribution amount. If your projected number feels short of your goal, try the calculator again with a few extra years before retirement to see the effect.
What This Doesn't Capture
This tool doesn't account for employer matching contributions (add those to your monthly contribution to include them), contribution limit caps on tax-advantaged accounts, taxes on withdrawals, Social Security or pension income, or changes to your contribution amount over time (most people increase contributions as their income grows). It also assumes a constant rate of return, which real markets don't provide — actual returns vary significantly year to year.