GrowthCalc › Compound Interest Calculator for Retirement
Compound Interest Calculator for Retirement: how it works
Retirement maths is simple and unforgiving: the money you add in your twenties and thirties does most of the work, and the money you add in your fifties mostly just sits there. A compound interest calculator makes that visible before it is too late to act on it.
This page preloads GrowthCalc with a typical starting point: $25,000 already saved, $600 a month added, a 7 percent annual return compounded monthly over 30 years, and inflation switched on at 3 percent so you also see the balance in today's money. Change any figure and the chart and table update instantly in your browser.
Reading the result like a planner would
Three numbers matter more than the headline balance:
- Total contributions vs interest. With the preset, roughly a quarter of the final balance is money you put in and three quarters is growth. That ratio is the reward for starting early; shorten the horizon to 15 years and it flips.
- The inflation-adjusted balance. A million dollars in 30 years buys what about $410,000 buys today at 3 percent inflation. Plan withdrawals against the adjusted figure.
- The yearly table. Find the year where annual interest first exceeds your annual contributions. From that point the portfolio is doing more than you are.
Which return and inflation rates to use
Long-run returns for a diversified stock portfolio have averaged around 10 percent a year before inflation in the US and closer to 7 percent after it, but with large swings between decades. A conservative plan uses 5 to 6 percent nominal with inflation on, or 4 percent real with inflation off. Run both: the gap between them is your margin of safety.
Remember that taxes and fees are not modelled. A 1 percent annual fee over 30 years removes roughly a fifth of the final balance, which is why low-cost index funds are the default recommendation in most retirement guides. This calculator is for education and planning, not personal financial advice.
Frequently asked questions
How much do I need to save monthly for retirement?
Switch GrowthCalc Pro's goal mode on, enter your target balance and horizon, and it solves for the monthly contribution. As a rough rule, saving 15 percent of income from your mid-twenties funds a conventional retirement at a 7 percent return.
Should I use the inflation-adjusted figure?
Yes, for deciding whether the plan is enough. Use the nominal figure only to compare against account statements.
What return should I assume for a 401(k) or pension?
Most planners use 5 to 7 percent nominal for a balanced portfolio. Test a lower figure too; a plan that only works at 10 percent is not a plan.
Does the calculator include taxes or employer matching?
No. Add an employer match to your monthly contribution manually, and remember withdrawals from pre-tax accounts are taxed.
Looking for the full guide, tips and the complete FAQ? Read the main GrowthCalc page.