1. What is the Retirement Savings Formula?

The Future Value formula calculates how much your retirement savings will grow over time, accounting for compound interest on both your initial savings and regular contributions.

2. How Does the Calculator Work?

The calculator uses the Future Value formula:

Where:

• \( Current \) — Current savings amount (USD)
• \( r \) — Annual interest rate (decimal)
• \( n \) — Number of years
• \( PMT \) — Annual contribution amount (USD)

Explanation: The first part calculates growth of initial savings, while the second part calculates the future value of a series of regular contributions.

3. Importance of Retirement Planning

Details: Proper retirement planning helps ensure financial security in later years by accounting for compound growth over time and regular savings contributions.

4. Using the Calculator

Tips: Enter current savings in USD, annual interest rate as decimal (e.g., 0.07 for 7%), number of years, and annual contribution amount in USD.

5. Frequently Asked Questions (FAQ)

Q1: Should I include employer matching in annual contributions?
A: Yes, include all contributions going into your retirement account, including any employer matches.

Q2: How should I estimate the annual interest rate?
A: Use a conservative estimate based on your investment mix (e.g., 5-7% for balanced portfolios).

Q3: Does this account for inflation?
A: No, the result is in today's dollars. For real value, use an inflation-adjusted interest rate.

Q4: What if I contribute monthly instead of annually?
A: The calculator assumes annual contributions. For monthly, divide the annual rate by 12 and multiply periods by 12.

Q5: How accurate are these projections?
A: They're estimates assuming constant returns. Actual results will vary with market performance.