Retirement calculator

Current value of retirement savings

is the total current balance of all your retirement savings, including those from 401ks, IRAs, and any other account’s balance you plan to use for retirement.

Determining how much to save for retirement is a personal journey that depends on various factors unique to your situation. While there’s no universal answer, we can provide some guidelines and considerations to help you start planning.

• Desired retirement age:

  The earlier you retire, the more you’ll need to save.

• Expected lifestyle:

  Your planned standard of living in retirement affects your savings goal.

• Life expectancy:

  Consider how many years you’ll likely spend in retirement.

• Healthcare costs:

  Factor in potential medical expenses, which often increase with age.

• Inflation:

  Account for the rising cost of goods and services over time.

• Current age and income:

  Your current situation impacts how much you can save and for how long.

While not one-size-fits-all, these rules of thumb can provide a starting point:

1. The 10% rule

Save at least 10% of your income throughout your working years.

2. The 15% rule

Many financial experts recommend saving 15% of your gross income for retirement.

3. Savings milestones by age

Aim for these multiples of your annual salary saved by certain ages:

These are general guidelines and may not fit everyone's situation. Consider consulting with a financial advisor for personalized advice. Factor in Social Security benefits and any pension plans you may have. Regularly review and adjust your retirement savings plan as your circumstances change.

The earlier you start saving, the more time your money has to grow through compound interest.

APY (Annual Percentage Yield) is determined by several factors and calculations. Here's an explanation of how APY is typically determined:

The basic interest rate is the starting point for calculating APY.

This is how often the interest is calculated and added to the principal. Common compounding periods include daily, monthly, quarterly, or annually.

APY is typically calculated for a one-year period.

The basic formula for APY is:

Where:

Start with the nominal interest rate.

Consider how often the interest compounds.

Consider how often the interest compounds.

Apply the formula to calculate the effect of compounding over a year.

Express the result as a percentage.

Interest calculation methods can vary by financial product and the terms set by the institution offering it. Compound interest is a financial concept where interest is calculated not only on the initial principal amount but also on the accumulated interest from previous periods. In other words, it's "interest on interest." Here’s how M1 calculates compound interest in this calculator;

First, you calculate the total amount of money you’ll have once you’re done saving, which includes interest:

Where:

The amount of money you should have in your emergency fund depends on your personal financial situation and comfort level, but there are some general guidelines that financial experts often recommend. Here's a breakdown:

Most financial advisors suggest having 3 to 6 months' worth of living expenses saved in your emergency fund.

Monthly Living Expenses × (3 to 6) = Emergency fund target

If saving 3-6 months' worth of expenses seems overwhelming, start with a smaller goal like $1,000 or one month's expenses, then build from there.

Emergency funds should be easily accessible. Consider high-yield savings accounts or money market accounts that offer some interest while maintaining liquidity.

The accounts that typically provide the best Annual Percentage Yield (APY) can vary over time based on market conditions and financial institution policies. However, certain types of accounts generally offer higher APYs than others. At the top of the list of accounts that often provide competitive APYs is;