How the projection works
The calculator starts with your current savings and adds your monthly contribution every month between now and your retirement age, applying your expected annual return along the way (divided into a monthly rate and compounded each month). What's left at the end is your projected nest egg: the total you and your investment growth built together.
Reading the 4% rule
The monthly income figure comes from the 4% safe-withdrawal rule: a long-standing rule of thumb that says withdrawing 4% of a retirement portfolio per year, adjusted for inflation, has historically had a good chance of lasting 30 years without running out. Here it's spread evenly across twelve months, so nest egg times 4% divided by 12 gives a rough monthly income number. It's a starting point for a conversation, not a guarantee, since it depends on the sequence of market returns you actually experience early in retirement.
What this doesn't account for
This model assumes a constant annual return every year, which real markets never deliver. It also ignores inflation, taxes, Social Security, pensions, and any changes to your contribution rate over time. Treat the nest egg and income numbers as a planning estimate that shows the shape of compounding, not a forecast of what your account will actually hold on the day you retire.