Estimate how much you could have saved by the time you retire. Enter your current age, desired retirement age, monthly contribution and expected annual return. Consistent saving and the power of compound interest are key to building a comfortable retirement fund.
Starting early and contributing regularly can dramatically increase your retirement savings due to compound interest. Even small monthly contributions grow over time. Consider investing in diversified portfolios and reviewing your plan annually. This calculator provides a simple projection based on constant contributions and fixed growth, but actual investment returns vary.
Retirement planning is one of the most important financial decisions you'll make. Understanding the key concepts and strategies can help you build a secure financial future and achieve your retirement goals.
Compound interest is often called "the eighth wonder of the world" because it allows your money to grow exponentially over time. When you earn returns on your investments, those returns generate their own returns, creating a snowball effect.
Key factors that amplify compound growth:
Employer-Sponsored Plans:
Individual Retirement Accounts (IRAs):
Other Investment Options:
Maximise Employer Matching:
Always contribute enough to your employer's retirement plan to receive the full company match. This is essentially free money and an immediate return on your investment.
Dollar-Cost Averaging:
Investing a fixed amount regularly (monthly or bi-weekly) helps smooth out market volatility and can result in better average purchase prices over time.
Gradual Increases:
Increase your contribution percentage annually, especially when you receive raises. This helps you save more without feeling the impact on your current lifestyle.
Tax-Efficient Investing:
Consider the tax implications of different account types and investment strategies to maximise your after-tax returns.
⚠️ This calculator provides estimates only:
Professional Advice:
Consider consulting with a qualified financial advisor who can help you:
Remember that retirement planning is a long-term process that requires regular review and adjustment as your circumstances change.
A common guideline for retirement is the 4% rule. It suggests that if you withdraw 4% of your total savings in the first year of retirement, and adjust that amount for inflation each following year, your money should last for 30 years.
Q: What annual return should I expect?
A: Historically, the stock market has returned about 7-10% annually before inflation. However, many planners use a more conservative 5-6% for long-term projections.
Q: Does this account for inflation?
A: This simple calculator does not automatically adjust for inflation. Remember that £1,000 today will have less purchasing power in 30 years.
Q: When should I start saving?
A: As early as possible! Thanks to compound interest, money invested in your 20s has much more time to grow than money invested in your 40s.