Project your retirement balance with compound interest and inflation adjustment.
We use compound interest formulas. Your existing savings grow as FV = savings × (1 + r)^n, where r is the monthly rate and n is the number of months. Monthly contributions grow as FV = contribution × ((1 + r)^n - 1) / r. The two are added together for your total projected balance.
Inflation erodes purchasing power over time. The inflation-adjusted balance shows what your projected savings would be worth in today's dollars, calculated as nominal balance / (1 + inflation rate)^years. A balance of $1,000,000 in 30 years may only have the purchasing power of around $400,000 today at 3% inflation.
Historically, a diversified stock portfolio (such as a broad index fund) has returned around 7% annually after inflation, or about 10% nominally. Conservative investors may use 4–5%, while aggressive investors might use 8–10%. The actual return depends on your asset allocation, market conditions, and fees.