# Savings Goal Calculator

Try the **savings goal calculator** to see **how much money you need to put aside to reach your savings goal**. Thanks to the tool's high specification, you can either

**set your savings goals by age**or set

**money-saving goals with a specific term or by a certain date**. Moreover, you can follow the precise schedule on a

**savings goal chart or table**.

## Retirement savings goals by age — an example

The best way to introduce this savings goal calculator is to go through a hypothetical example.

Let's say you are considering **setting a saving goal** after your graduation **at the age of 32** — your saving goal is to have **1 million dollars** when you retire **at age 65**. Assuming you invest your monthly saving on the stock market, which has a **10 percent annual return**, how much money must you put aside at the end of each month to reach your saving goal? The answer is that you need to **contribute to your dream** precisely **by $323.69 each month** to reach your savings goal. However, multiple aspects can affect this amount. So, let's check a few scenarios!

First of all, the most crucial factor that can alter the required savings is your investment earnings' return or interest rate. **If your return drops to 8 percent**, the required monthly **contribution will rise to $517.16**. On the other hand, **if the return rises to 12%**, you would need to put away only **$198.27 per month**.

But what if you decide to take a mortgage or have a student loan so you can't start saving right now? **If you wait until age 40 to start saving**, you will need to save **753.67 dollars per month** to reach your 1 million dollars savings goal, assuming you can earn 10%, but **1,051.50 dollars per month if you earn only 8 percent**. If you **wait until age 50 and then earn 8 percent**, the required amount will be **2,889.85 dollars per month**! Not a small difference, is it?

## Money saving goals vs. inflation

Although 1 million dollars may seem like a lot of money, most probably it won't be by the time you retire. If **inflation averages 4 percent a year** over the next 33 years, **you need to collect over 4,8 million dollars** to keep the buying power of your savings goal the same, which is **1,554.07 dollars each month**!

If you live for 20 years after retirement and earn a real 3% rate of return, your annual retirement income in today's dollars would be only $9,733 before taxes.

So, after celebrating your graduation and the new job, start saving!

## How to use the savings goal calculator?

Here's a short set of instructions explaining how to use the calculator:

**Saving objectives**

After setting your savings goal, you can choose three different ways to define the time horizon you need to wait until you reach your target:

*A specific term*;*A specific date*; or*A certain age*.

You can also set any savings you start with in this section.

**Saving conditions**

- Interest rate: It is the average annual rate of return or annual nominal interest rate you expect over the time until your savings goal.
- Compounding method: It is the frequency at which interest is added to the principal balance of your savings — or, in other words, how often your earned return or interest is reinvested.
- Inflation rate: The expected average inflation rate in a year.

**Periodic contribution**

- How often will you make a contribution?
- When in the payment period will you make it?
- Growth rate of your contribution: The percentage growth rate of your additional periodic contribution over a year or period.

**Results**

In this section, you can check the main details of your savings plan and check your **savings schedule in a table** or follow your plan's progress in a **savings goal chart**.

## Disclaimer

You should consider the savings goal calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates are based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.

**put aside $323.69 each month**to reach your savings goal.

**sum of your monthly savings**will be

**$128,183.11**, with a

**total return of $871,816.89**.