How to read your retirement projection
The chart splits what you put in (contributions) from what the market adds (growth). Early on, your contributions do most of the work; later, growth pulls ahead and eventually dwarfs everything you contributed. Most people are surprised that the largest single-year jump in their balance comes in the last few years before retirement — compounding working on a large base. That same fact is why interrupting contributions early, or a poor market run near the finish line, does outsized damage.
The three levers that decide your outcome
Every retirement projection comes down to three inputs, and they are not equally powerful over a long horizon:
- Time — the most powerful lever, because it compounds every dollar and every percent. A decade of early contributions usually beats two decades of late ones.
- Return — powerful but partly outside your control, and risky to assume optimistically. Small differences compound into very large gaps, and the order of good and bad years matters, not just the average.
- Contribution — the lever you control most directly. Raising it is the surest fix when the other two disappoint.
Why the last decade matters most
Because the balance is largest near the end, the years just before retirement carry the most risk. A market drop at 64 erases far more dollars than the same percentage drop at 34 — this is sequence-of-returns risk. A constant-return projection like this one cannot show it, which is exactly why protecting the final stretch matters as much as growing the balance.
From a number to a plan
This tool projects accumulation only — it does not model taxes, Social Security, or how you draw the money down. Pair it with the rest of the cluster to turn a projection into a plan:
How Much Do I Need to Retire?
Turn a target income into the nest egg you need — and see the gap.
Open →401(k) Calculator
Add the employer match and 2026 IRS limits to your projection.
Open →Roth IRA Calculator
See tax-free growth within the IRS contribution limits.
Open →Traditional vs Roth
Compare after-tax outcomes the fair way before you choose.
Open →Frequently asked questions
- How big should my nest egg be?
- A common rule of thumb is 25× your expected annual spending (the inverse of a 4% withdrawal rate), but your number depends on lifestyle, longevity, and other income. Treat rules of thumb as a starting point, not an answer — the retirement-shortfall calculator turns your target income into a specific number.
- What return rate should I assume?
- A long-run diversified portfolio has historically returned roughly 7% after inflation, but that is an average, not a promise. Use a conservative figure and test a range rather than relying on the optimistic case.
- Why does the return assumption matter so much?
- Over decades, small differences in return compound into very large differences in outcome — and the order of good and bad years matters, not just the average.
- Are these future dollars or today's dollars?
- This tool projects nominal (future) dollars. To see what your nest egg buys in today's terms, account for inflation — the “How much do I need to retire?” tool inflates your target for you.
- When should I start?
- As early as possible. Because the biggest gains come late and compound on everything before them, a decade of early contributions is typically worth far more than the same decade started later.
This calculator is for educational purposes only and does not constitute financial, tax, or investment advice. It models accumulation under a constant return; real outcomes vary with markets, taxes, and the order of returns.