Retirement Calculator

Project your retirement nest egg and estimate the safe annual income it could support. Works for 401(k), IRA, SIPP, pension, or any tax-advantaged long-term investment account.

How the projection works

Your retirement balance is calculated in two parts: the future value of your current balance compounding alone, plus the future value of all your monthly contributions (including any employer match). With monthly rate r = annual return ÷ 12 and n months until retirement:

FV = balance · (1 + r)n + monthly · ((1 + r)n − 1) / r

The “safe annual income” at the bottom applies the withdrawal rate (default 4%, the classic Trinity Study rule of thumb) to your projected balance. The idea: if you withdraw 4% of your starting retirement balance each year, adjusted for inflation, a diversified portfolio has historically lasted at least 30 years in roughly 95% of rolling US market periods.

Worked example

A 35-year-old with £50,000 saved, contributing £800/month, earning a 4% employer match on a £75,000 salary, and assuming a 7% annual return, retires at 65 with roughly £2.05 million. Of that, about £480,000 is contributions; the remaining £1.57 million is investment growth — i.e., 76% of the final balance is interest on interest. A 4% withdrawal rate gives roughly £82,000/year in retirement income from the portfolio alone, before any social security or pension.

The single biggest variable

It's not the return rate. It's time. Starting 10 years earlier — same contribution, same return — typically more than doubles the end balance, because the last decade is doing roughly half the compounding work. If you're young and can afford to contribute even a small amount, doing so is mathematically more important than picking the “right” investments.

Caveats

• Returns are not guaranteed. 7% is a long-run US equity historical average, not a forecast. Real returns vary widely year to year.
• Inflation reduces purchasing power. £2M in 30 years buys less than £2M today. Subtract roughly 2-3% from the return rate to think in real (inflation-adjusted) terms.
• Sequence-of-returns risk matters. A crash in the first 5 years of retirement is far more damaging than the same crash 20 years in. The 4% rule was designed with this in mind, but it isn't a guarantee.
• Fees compound against you. A 1% expense ratio over 30 years reduces your end balance by roughly 25%.

Disclaimer

Educational only. Not financial advice. Tax treatment of contributions and withdrawals varies dramatically by country, account type (401(k), Roth IRA, SIPP, etc.), and individual circumstances. Consult a qualified financial planner before making retirement decisions.