Formula
Nest egg = current savings × (1 + monthly return)^months + contribution × (((1 + monthly return)^months − 1) ÷ monthly return). Sustainable monthly drawdown = nest egg × monthly return ÷ (1 − (1 + monthly return)^−drawdown months).
Retirement Calculator
Project a retirement nest egg from current savings and monthly contributions, then estimate sustainable monthly drawdown against an income target.
Worked example
With 75,000 saved, 750 contributed monthly for 25 years and a 6% annual return, the projected nest egg is about 702,688. A 25-year drawdown at the same return supports about 4,527 per month before tax, fees and inflation.
Professional note
Master’s Tip: run a lower-return version and a 0% version. Retirement plans are fragile when the target only works under an optimistic return assumption.
Regional and unit assumptions
Standard or basis: transparent future-value and annuity drawdown arithmetic. No local pension, tax, social-security, superannuation, investment or retirement-income rule is claimed.
Assumptions and limitations
- The annual return is a planning assumption, not a guaranteed investment result.
- Contributions are treated as equal end-of-month deposits until retirement.
- The same monthly return assumption is used for the drawdown estimate.
- Inflation, tax, pension rules, superannuation rules, fees, sequence risk and changing returns are excluded.
- This is educational arithmetic only, not financial advice.
Methodology & Accuracy
How this calculator is checked
CalculationTime pages are built around visible arithmetic: the formula, assumptions, worked example and practical limitations are shown so the result can be checked rather than simply trusted.
Formula used
Nest egg = current savings × (1 + monthly return)^months + contribution × (((1 + monthly return)^months − 1) ÷ monthly return). Sustainable monthly drawdown = nest egg × monthly return ÷ (1 − (1 + monthly return)^−drawdown months).
Standard or basis
Standard or basis: transparent future-value and annuity drawdown arithmetic. No local pension, tax, social-security, superannuation, investment or retirement-income rule is claimed.
Where a calculator follows a named legal, trade or industry standard, that standard is cited visibly. Otherwise the page uses transparent general arithmetic and states its limits.Master's Tip
Master’s Tip: run a lower-return version and a 0% version. Retirement plans are fragile when the target only works under an optimistic return assumption.
Related calculators
Questions
How is the retirement nest egg projected?
The calculator compounds current savings forward and adds the accumulated value of monthly contributions over the years to retirement.
What does sustainable monthly drawdown mean?
It is the monthly withdrawal that would mathematically spend the projected nest egg over the selected retirement period under the entered return assumption.
Does this include inflation?
No. Inflation, taxes, fees, benefit rules and changing returns are excluded, so use the result as a transparent arithmetic scenario only.
Can the result be used as financial advice?
No. Retirement planning is high-stakes and should be checked with qualified advice and official local rules.
Why include a desired monthly income?
The income target turns the projected balance into a practical gap check, showing whether the modelled drawdown is above or below the entered monthly goal.
Calculation note
Retirement calculators combine accumulation and drawdown. The useful question is not only how large the balance could become, but what monthly income that balance might support under visible assumptions.
Future value projects forward from known inputs
The starting amount, contribution amount, rate, time and compounding basis are visible because each one can materially change the answer. The formula does not hide the fact that the future value is an estimate, not a promise.
Deposits need a timing convention
This page assumes monthly contributions arrive at the end of each month. That conservative convention keeps the report simple and prevents the calculator from quietly giving deposits extra growth time.
The 0% comparison keeps the projection honest
A zero-rate row shows the cash-only total. Comparing that row with the entered-rate result reveals how much projected growth is doing in the calculation.
Future value and present value are paired ideas
Future value moves money forward through time. Present value works backward from a future amount to an equivalent amount today. Using both pages together can make finance comparisons clearer.