How the projection is calculated
FV = S × (1 + i)^m + C × ((1 + i)^m − 1) / i i = (1 + r)^(1/12) − 1 C = (FV − S × (1 + i)^m) × i / ((1 + i)^m − 1)
S is what you have already saved, C the monthly saving, m the number of months and r the expected annual return. The return is treated as an effective yearly rate and spread evenly across the months as i, so twelve months at i add up to exactly r. Deposits are made at the end of each month.
In goal mode the calculator turns the formula around and solves for C: the gap between the target FV and what your current savings grow to on their own, divided by what saving 1 a month grows to. If you raise the saving every year, the same idea applies with growing deposits, and the result is the amount to save each month in the first year.
To express a result in today's money, the calculator divides it by (1 + inflation) for every year. In goal mode it also shows the opposite view: how much the target will really buy, and what you would need to save to reach the target's current purchasing power.
Worked example
Save $500 at the end of every month for 30 years with an average return of 6% a year and you deposit $180,000 in total. The balance could reach $487,256.49, so $307,256.49 of it comes from growth.
With prices rising 3% a year, $487,256.49 in 30 years will buy about what $200,743.22 buys today.
Turned around: to reach $1,000,000 in 30 years at the same 6%, you would need to save $1,026.15 a month.
How to read the results
The projected balance is what your savings could be worth at the end if the return you entered is achieved every year. Total deposited is the money you put in, including what you had already saved; investment growth is the rest.
The value in today's money is the most honest number for long-term goals: it tells you what the balance will actually buy. Because the monthly saving stays the same in money terms, inflation slowly erodes its value; raising it every year, for example in line with your pay, keeps the plan on track.
In goal mode, the monthly saving needed is a starting point, not a promise. Real returns go up and down, so check the plan every year or two and adjust the saving if you fall behind.
Assumptions and limits
- The return is the same every year; real investments fluctuate and can lose value.
- Deposits happen at the end of each month and only change through the yearly increase you set.
- Taxes, fund charges and fees are not deducted.
- Inflation is a constant rate you choose.
- The results are estimates for planning purposes, not financial advice or a guarantee.
Frequently asked questions
How much should I save each month?
Use the goal mode: enter your target, how many years you have, what you have already saved and an expected return, and the calculator works out the monthly saving. For example, reaching 1,000,000 in 30 years at a 6% annual return takes about 1,026 a month from scratch.
What return should I expect?
It depends on what you invest in. Cash savings pay roughly the interest rate on deposits; diversified stock funds have historically returned more over long periods, but with large ups and downs. A cautious assumption and a range of scenarios is safer than one optimistic number.
Why does inflation matter for a savings goal?
Because a target set in today's money will be worth less when you reach it. At 3% inflation, 1,000,000 in 30 years buys about what 412,000 buys today. If your goal is a lifestyle rather than a number, plan for the inflated target.
How much does starting early help?
A lot, because each deposit has longer to grow. Saving 500 a month at 6% for 30 years builds about 487,000; waiting ten years and saving the same amount for 20 years builds about 227,000 — less than half, from only a third less in deposits.