FINRA Retirement Savings Calculator
Use this calculator to estimate how much you might have saved by retirement and how long those savings could last, considering inflation and investment returns. Planning for retirement is a critical step towards financial security.
Understanding Your Retirement Plan
Retirement planning is a long-term process that involves setting financial goals and making informed decisions to achieve them. This FINRA-inspired calculator helps you visualize your potential retirement future by considering key financial variables.
How the Calculator Works
The calculator takes several inputs to project your retirement savings and income sustainability:
- Your Current Age & Retirement Age: These determine the number of years you have left to save. The longer your savings horizon, the more time your money has to grow.
- Current Retirement Savings: This is the starting point of your investment portfolio.
- Annual Savings Contribution: The amount you plan to add to your retirement accounts each year. Consistent contributions are vital for compounding growth.
- Expected Annual Return (Pre-Retirement): The average annual growth rate you anticipate your investments will achieve before you retire. This rate significantly impacts your final savings total.
- Expected Annual Return (Post-Retirement): The average annual growth rate you anticipate your investments will achieve during your retirement years, while you are making withdrawals.
- Expected Annual Inflation Rate: Inflation erodes the purchasing power of money over time. This calculator adjusts your desired retirement income for inflation, providing a more realistic picture of your future needs.
- Desired Annual Retirement Income (Today's $): This is the amount of income you'd like to have each year in retirement, expressed in today's dollars. The calculator will adjust this for inflation to determine your actual income need at retirement.
Interpreting Your Results
The output will provide you with:
- Estimated Savings at Retirement: This is the projected total value of your retirement portfolio when you reach your planned retirement age, assuming your specified savings and returns.
- Inflation-Adjusted Desired Annual Income: This shows what your desired annual income (entered in today's dollars) will actually need to be at your retirement age to maintain the same purchasing power, due to inflation.
- Projected Years Your Savings Will Last: This is a crucial metric, indicating how many years your accumulated savings are estimated to support your inflation-adjusted desired income, considering post-retirement investment returns.
Key Factors Influencing Your Retirement
Several factors can significantly impact your retirement outlook:
- Starting Early: The power of compound interest means that money saved earlier has more time to grow.
- Savings Rate: Increasing your annual contributions can dramatically boost your retirement nest egg.
- Investment Returns: Higher returns can accelerate your savings growth, but also come with higher risk.
- Inflation: Often underestimated, inflation can significantly reduce the purchasing power of your savings over decades.
- Retirement Age: Working longer means more years to save and fewer years to draw down your savings.
Important Considerations
This calculator provides an estimate and should be used as a planning tool, not as definitive financial advice. Market conditions, personal circumstances, and tax laws can change. It's always advisable to consult with a qualified financial advisor to create a personalized retirement plan tailored to your specific situation.
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function calculateRetirement() {
// Get input values
var currentAge = parseFloat(document.getElementById('currentAge').value);
var retirementAge = parseFloat(document.getElementById('retirementAge').value);
var currentSavings = parseFloat(document.getElementById('currentSavings').value);
var annualSavings = parseFloat(document.getElementById('annualSavings').value);
var preRetirementReturn = parseFloat(document.getElementById('preRetirementReturn').value) / 100;
var postRetirementReturn = parseFloat(document.getElementById('postRetirementReturn').value) / 100;
var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100;
var desiredAnnualIncome = parseFloat(document.getElementById('desiredAnnualIncome').value);
var resultDiv = document.getElementById('retirementResult');
resultDiv.innerHTML = "; // Clear previous results
// Input validation
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(currentSavings) || isNaN(annualSavings) ||
isNaN(preRetirementReturn) || isNaN(postRetirementReturn) || isNaN(inflationRate) || isNaN(desiredAnnualIncome)) {
resultDiv.innerHTML = 'Please enter valid numbers for all fields.';
return;
}
if (currentAge <= 0 || retirementAge <= 0 || currentSavings < 0 || annualSavings < 0 ||
preRetirementReturn < 0 || postRetirementReturn < 0 || inflationRate < 0 || desiredAnnualIncome < 0) {
resultDiv.innerHTML = 'Please enter positive values for all fields (or zero for savings/income if applicable).';
return;
}
if (retirementAge 0) {
fvAnnualSavings = annualSavings * ((Math.pow((1 + preRetirementReturn), yearsToRetirement) – 1) / preRetirementReturn);
} else { // If return is 0, it's just sum of contributions
fvAnnualSavings = annualSavings * yearsToRetirement;
}
// 3. Total Savings at Retirement
var totalSavingsAtRetirement = fvCurrentSavings + fvAnnualSavings;
// 4. Calculate Inflation-Adjusted Desired Annual Income at Retirement
var inflationAdjustedIncome = desiredAnnualIncome * Math.pow((1 + inflationRate), yearsToRetirement);
// 5. Calculate How Long Savings Will Last in Retirement (Simulation)
var yearsOfRetirement = 0;
var remainingBalance = totalSavingsAtRetirement;
var currentAnnualWithdrawal = inflationAdjustedIncome;
var maxRetirementYears = 100; // Prevent infinite loop for unrealistic scenarios
if (totalSavingsAtRetirement 0) {
resultDiv.innerHTML = '
Estimated Savings at Retirement: $' + totalSavingsAtRetirement.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'
Inflation-Adjusted Desired Annual Income at Retirement: $' + inflationAdjustedIncome.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'Your savings are insufficient to cover any retirement income.';
return;
}
if (desiredAnnualIncome <= 0) {
resultDiv.innerHTML = '
Estimated Savings at Retirement: $' + totalSavingsAtRetirement.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'
Inflation-Adjusted Desired Annual Income at Retirement: $' + inflationAdjustedIncome.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'You have not specified a desired annual income, so your savings will last indefinitely.';
return;
}
while (remainingBalance > 0 && yearsOfRetirement 0 && yearsOfRetirement >= maxRetirementYears) {
yearsLastedMessage = 'Your savings are projected to last for ' + maxRetirementYears + '+ years (potentially indefinitely).';
} else if (remainingBalance 0) {
yearsLastedMessage = 'Your savings are projected to last for approximately
' + (yearsOfRetirement – 1) + ' years.'; // Subtract 1 because it ran out *during* the last year
} else {
yearsLastedMessage = 'Your savings are projected to last for less than 1 year with your desired income.';
}
// Display results
resultDiv.innerHTML =
'
Estimated Savings at Retirement: $' + totalSavingsAtRetirement.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'
Inflation-Adjusted Desired Annual Income at Retirement: $' + inflationAdjustedIncome.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }) + " +
'
Projected Years Your Savings Will Last: ' + yearsLastedMessage + ";
}