Saving for Retirement
Essential Calculators
Use these tools to run the numbers for this scenario.
Action Plan Checklist
- Determine your target retirement age and estimated lifestyle costs.
- Take advantage of employer matches in 401(k) accounts.
- Set up automatic monthly contributions to your investment accounts.
- Review your portfolio's estimated APY to ensure it meets your growth targets.
Required Reading
Deep dive into the strategies behind this use case.
What is Compound Interest? Guide to Compounding Growth
Compound interest is the interest you earn on both your original money and on the interest you keep accumulating. It is the core concept behind long-term wealth building.
Simple vs Compound Interest: What is the Difference?
A detailed breakdown of simple versus compound interest. Learn the math behind each and understand how compounding frequency affects your money.
Key Terminology
Understand the financial and mathematical terms involved.
Worked Examples
Real-world scenarios with step-by-step calculations.
Investing $500 a Month for 30 Years
This example demonstrates the power of compound interest over a long time horizon. Even though the investor only put in $180,000 of their own money, the balance grew to over $600,000 because the interest earned kept generating its own interest.
View in Calculator →Frequently Asked Questions
When should I start saving for retirement?
As early as possible. Thanks to compound interest, money invested in your 20s has vastly more growth potential than money invested in your 40s.
What is a realistic interest rate to expect?
Historically, the stock market (like the S&P 500) has returned around 7% to 10% annually before inflation.