The formulas
- First withdrawal = income x (1 + inflation)^years to retirement, taken at the start of each year
- Need = first withdrawal x (1 - q^n) / (1 - q), q = (1 + inflation) / (1 + retirement return)
- Projected = savings x (1 + r)^t + contribution x ((1 + r)^t - 1) / r
How it works
The tool prices the income you want in future dollars, then finds the sum that pays it, growing with inflation, for the number of years you enter while the balance earns the retirement return.
It compares that sum with what your savings and yearly contributions may grow to. Results are very sensitive to the return and inflation you assume. It leaves out Social Security, pensions, taxes on withdrawals and changes in spending. Treat it as a planning aid.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Why is a lower retirement return used?
Many people shift to safer assets near retirement. Set both returns equal if you disagree.
Are contributions growing?
No. They are level. Use the extra saving row to see a catch-up amount.
Does it include Social Security?
No. Lower the income wanted by the benefit you expect, in today's dollars.
Formulas on this page are the standard definitions.
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.