Retirement
Projected nest egg
Grows the current balance and the future value of the monthly contributions.
The Formula
FV = savings x (1 + r)^n + contribution x ((1 + r)^n - 1) / r
Grows the current balance and the future value of the monthly contributions.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| S | Current savings | currency | Balance today. |
| C | Monthly contribution | currency | Amount added each month. |
| r | Monthly return | rate | Annual return divided by twelve. |
| n | Months | count | Months until retirement. |
What Each Symbol Means
Scurrency
Current savings
Balance today.
Ccurrency
Monthly contribution
Amount added each month.
rrate
Monthly return
Annual return divided by twelve.
ncount
Months
Months until retirement.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate retirement savings page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Retirement Savings, filed under Finance. Every number the guide produces comes from substituting into this one line.