Retirement Calculator — Calculations & Slabs for FY 2026-27
Enter your current age, retirement age, monthly savings, and expected return to project your retirement corpus and the monthly income it can sustain.
1. Nest Egg Input Variables
Projection Summary
Growth Curve Projections
Actionable Recommendations
📈 The Mathematics of Retirement Capitalization & Inflation Drag
Retirement financial planning relies extensively on compound growth formulas to project how recurring investments, initial capital, and compound interest grow over decades. However, a major threat to any retirement plan is the eroding effect of inflation. To achieve a realistic financial target, you must distinguish between your nominal nest egg value (the cash value in the future) and its real purchasing power (the value in today's dollars).
Core Mathematical Equations
Our retirement projections run standard financial formulas compounded monthly to match typical investment frequencies.
- Compound Growth of Initial Principal: The value of your current savings grows exponentially over time:
FV_principal = P_0 × (1 + r / 12)^(n × 12)Where P_0 is the current savings, r is the nominal annual rate of return, and n is the duration in years. - Future Value of an Ordinary Annuity: The compound growth of your monthly savings contributions is solved using:
FV_annuity = PMT × [ ((1 + r / 12)^(n × 12) - 1) / (r / 12) ]Where PMT is the monthly saving amount. - Inflation Adjustment Factor: To find the real purchasing power under a standard 3% inflation rate, we discount the nominal future value back to today's currency:
FV_real = FV_nominal / (1.03)^nThis 3% annual drag represents the historical target for average consumer price index (CPI) changes in modern developed economies.
Determining Sustainable Income: The 4% Rule
Once you reach your target retirement age, your portfolio stops accumulating and starts distributing. The Safe Withdrawal Rate (SWR) is a critical guide. Originating from the Trinity Study, the classic 4% rule proposes that you can safely withdraw 4% of your initial retirement portfolio value in the first year, and adjust subsequent annual withdrawals by inflation, with a high probability that the portfolio will survive at least 30 years.
For example, if your real nest egg is $1,000,000, a 4% safe withdrawal yields $40,000 per year in inflation-adjusted purchasing power. If your expected annual expenses are $60,000, this creates an annual deficit of $20,000, signifying that you need to either save more, retire later, or reduce your budget.