Financial Life Simulator

Your Financial Life in Numbers

One number comes out of this: the balance a steady monthly contribution reaches by your target retirement age. What that number covers is narrower than the tool's name suggests. The model compounds a fixed share of a flat income and reports the total, plus what a 4% annual withdrawal from it would pay each month. It does not track your career earnings, your spending, your tax, or the drawdown years after you stop.

The reason a single number is still useful is the split inside it. At the default inputs, 55,000 of income at a 15% savings rate from age 30 to 65, the contributions total 288,750 across 420 months. The projected balance is 1,238,225. Growth accounts for 949,475 of that, a little over three quarters. Most of what arrives is not what you put in.

The Details People Often Overlook

The assumptions do more work than the headline, and the horizon does most of it. Raising each input by 10% from the defaults moves the result by very different amounts: target retirement age by 62.9%, current age by 20.7% in the opposite direction, expected return by 18.4%, and income and savings rate by exactly 10% each.

That last detail is worth knowing. Income and savings rate enter the formula as a straight multiplier, so doubling either exactly doubles the result: a 10% savings rate projects 825,483 and 20% projects 1,650,967, to the last unit. Time and rate do not behave that way, because they sit in an exponent. This is why two people with identical incomes and identical discipline can end up in very different places, and why the gap traces back to when they started rather than to what they earned.

What this calculation can miss

The model holds income flat for the whole period, which no career does, and holds the savings rate constant through every year of it, which few lives allow. A decade at a reduced rate, a career break, or a long stretch of higher earnings all change the answer, and none of them can be entered here.

Nothing is adjusted for inflation either, so the projected balance is in the money of the retirement year rather than today's. At 3% over 35 years prices multiply by 2.81, so 1,238,225 then has the purchasing power of about 440,000 now, roughly 36% of its face value, and the 4,127 monthly figure is worth nearer 1,470. Tax is absent, fees are absent, and the return is a single rate standing in for decades of variation. A balance that averages 7% gets there through individual years of heavy loss, and the order those arrive in changes the outcome even when the average does not. Investor education on that distinction is coordinated internationally through IOSCO, whose membership covers the securities regulators of more than 100 jurisdictions.

Quick example

Age 30, income 55,000, savings rate 15%, expected return 7%, retirement at 65. That is 687.50 saved each month for 420 months, and the projection is 1,238,225.

The result card breaks that into the 35 years remaining, the 687.50 monthly figure, and 4,127.42 as the monthly income a 4% annual withdrawal would produce. Contributions account for 288,750 of the balance and growth for the other 949,475.

Which inputs matter most

Not the ones people usually adjust. Raising every input by the same 10%, target retirement age moves the result 62.9% and current age moves it 20.7% the other way. Both are the same lever: the formula depends only on the gap between the two ages, which is why starting at 25 instead of 30 and retiring at 70 instead of 65 produce the identical 1,804,559.

Expected return comes next at 18.4%, and it is the input with the least evidence behind it. Income and savings rate come last at exactly 10% each, which is the arithmetic being linear in both rather than a coincidence. Percentages of an age are a slightly artificial way to compare, so in plain terms: five more working years adds 45.7%, five percentage points more savings adds 33.3%, and one percentage point more return adds 27.4%. The two inputs anyone can state precisely are still the two that matter least.

What's happening under the hood

The monthly contribution is income multiplied by the savings rate and divided by 12. That amount is compounded monthly at the annual return divided by 12, for twelve times the number of years between current age and retirement age. The result is the standard future value of a series of equal payments, with no opening balance.

Two details in that are easy to miss. Compounding is monthly rather than annual: the same inputs run annually give 1,140,454, so the monthly convention adds 8.6% before anything else is decided. And there is no starting balance, so anything already saved is not counted. Someone with an existing pot should read the output as what the new contributions add, not as a total.

Using this to recalibrate

Changing one input at a time is more informative than the headline, because it separates the figures that are known from the figures that are guesses.

The return rate is the one worth moving furthest. At 4% the same inputs project 628,190, at 7% they project 1,238,225, and at 9% they reach 2,022,477. That is a spread of more than three to one across a range of assumptions any of which someone might defend. Retirement age behaves similarly: 60 gives 838,730 and 70 gives 1,804,559. Reading the output as a range between a cautious pair of assumptions and an optimistic pair is more honest than reading any single run of it.

What this doesn't capture

The drawdown years are not modelled. The 4% row applies a single withdrawal rate to the projected balance and divides by twelve, which is a rule of thumb rather than a plan: it says nothing about how long the money lasts, what happens in a bad first decade, or what other income arrives. Public retirement provision differs enormously between countries, and the International Labour Organization tracks how those systems are structured.

Everything here is nominal, undiscounted and untaxed, and the colour on the result is keyed to a rough benchmark of ten times current income rather than to anything about your circumstances. The figure is an illustration of what compounding does to a regular contribution over a long horizon. Treating it as a retirement plan would be reading far more into it than it contains.