How It Works
- Current value of your prediction-enabled assets
- Value-weighted expected annual return across those assets
- Time horizon from your current age to your target age
- Closed-form compound growth solve for the monthly contribution
- Comparison against your current recurring investments
Key Assumptions
- 1Expected returns remain consistent over the whole horizon
- 2The required contribution is invested every month without interruption — flat, unless the optional contribution growth simulation is enabled
- 3New contributions earn the same weighted return as the existing portfolio
- 4Returns compound monthly
- 5Taxes and inflation only affect the result when their optional simulations are enabled
Mathematical Approach
The target is solved with the future value of an annuity formula: Target = P × (1 + r)^n + C × [((1 + r)^n − 1) / r] Where: P = current portfolio value r = weighted expected return / 12 n = months until your target age C = required monthly contribution (solved for) With the contribution growth simulation applied, the annuity term becomes a growing annuity — C becomes the starting amount of a schedule that rises at your growth rate. If growth alone already reaches the target, the required contribution is zero — you're on track without saving more.
Important Limitations
- Market volatility not considered
- Assumes a constant blended return for new contributions
- Inflation reduces the real value of a fixed target amount unless the inflation simulation is enabled
- The tax simulation estimates capital gains tax from projected growth, not your actual purchase history
- Results become less accurate over longer periods
Important: All predictions are estimates based on assumptions and should not be considered as guaranteed outcomes. Actual results may vary significantly due to market conditions, economic changes, and personal circumstances.
Frequently Asked Questions
How much do I need to save per month to reach my goal?
Required Savings Rate solves the future-value-of-annuity equation backwards: given your current portfolio, expected return, and time to your target age, it computes the exact monthly contribution that lands on your target — and tells you if compounding alone already gets you there.
What if I plan to increase my savings every year?
Enable the contribution growth simulation: the answer then becomes a starting amount that rises each year at your chosen rate, solved with a growing-annuity formula.
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The information and calculations provided are for informational and educational purposes only and should not be considered financial, investment, or professional advice. Projections are hypothetical, based on assumptions that may not reflect actual market conditions. Past performance does not guarantee future results, and all investments carry risk of loss. Consult a qualified financial professional before making financial decisions.