METHODOLOGY · VERSION 2026-09-23.1

What the numbers mean.

This tool shows a hypothetical savings balance and first-year income comparison. It does not forecast actual investment returns or decide whether you can retire. Calculations use formulas, not generative AI.

1. Project the savings balance

The years to retirement equal your retirement age minus your current age. We convert the annual effective return to a monthly rate: monthly rate = (1 + annual return)^(1/12) − 1. Percentages are converted to decimals first.

For each month, we multiply the previous balance by one plus the monthly rate, then add your monthly contribution. Contributions stay constant in nominal dollars and arrive at month-end. No contributions are added when retirement age equals current age. Contributions, expenses and other income are not automatically adjusted for salary changes or taxes.

2. Show purchasing power

The balance in today’s dollars equals the future balance divided by (1 + annual inflation)^years. This lets you compare projected savings with spending and other income entered in today’s dollars.

3. Illustrate first-year income

We multiply savings in today’s dollars by your first-year withdrawal percentage and divide by 12. We then add the other monthly income you entered. The 4% starting value is an illustration, not a safe withdrawal recommendation. We do not simulate later withdrawals or depletion.

Income is before taxes. Include expected taxes in your spending goal if you want to explore that budget assumption. Social Security, pension amounts and future benefit adjustments are not calculated or verified by this site.

4. Compare income with spending

Income coverage equals illustrative monthly income divided by monthly spending, multiplied by 100. Our site-defined bands are A:100% or above; B:90% to below100%; C:75% to below90%; D:50% to below75%; F:below50%. Displayed percentages are rounded; the band uses the unrounded value.

These bands are an educational labeling choice. They are not independently validated ratings, probabilities, a measure of investment quality, or an assessment of your adviser. An A does not establish retirement readiness.

5. Explore uncertainty

The three scenarios use your return assumption and two percentage points above and below it, bounded by the calculator’s −20% to15% input range. They hold other inputs constant. They are not probabilities or best/worst outcomes; real outcomes may be outside this range.

What is not modeled

Variable returns, sequence-of-returns risk, longevity, tax rules, contribution limits, required distributions, healthcare changes, withdrawals before retirement, account restrictions, and plan-specific costs are not modeled. Use an after-fee return assumption. Review your own account terms and circumstances with an appropriate professional before acting.