What is the "How Much Monthly to Retire" Calculator?
This calculator tells you how much you need to invest every month to reach a target retirement nest egg. It accounts for the money you have already saved, the number of years until you retire, and your expected average annual investment return. Figures are in US dollars but the math is universal and applies to any currency.
How to use it
Enter your retirement goal (the lump sum you want at retirement), your current savings, the number of years until you retire, and your expected annual return as a percentage. The result is the level monthly contribution that, combined with the growth of your existing savings, reaches your goal.
The formula explained
The tool converts the annual return to a monthly rate \(r = \frac{\text{annual\%}/100}{12}\) and uses the total number of months \(n = \text{years} \times 12\). The future value of your current savings is \(\text{Current} \times (1+r)^{n}\). The remaining amount is funded by monthly deposits using the future-value-of-an-annuity formula solved for the payment:
$$\text{PMT} = \frac{\left(\text{Target} - \text{Current} \times (1+r)^{n}\right) \times r}{(1+r)^{n} - 1}$$
Worked example
Goal $1,000,000, current savings $50,000, 30 years, 6% annual return. Monthly rate \(r = 0.005\), months \(n = 360\). \((1.005)^{360} \approx 6.022575\). Future value of current savings $$= 50{,}000 \times 6.022575 \approx \$301{,}128.76.$$ Amount still needed \(= 698{,}871.24\). $$\text{PMT} = \frac{698{,}871.24 \times 0.005}{6.022575 - 1} \approx \$695.73 \text{ per month.}$$
FAQ
Does it assume monthly compounding? Yes — contributions are made monthly and returns compound monthly, which matches how most investment plans work.
What return should I use? A diversified long-term portfolio has historically returned roughly 5–8% annually before inflation. Use a conservative figure to be safe.
What if my current savings already cover the goal? The required monthly contribution is shown as $0.
