An account label does not set a return
Retirement growth comes from the assets, interest and cash flows in an account, not from the account name alone. A projection needs a starting balance, future contributions, a growth convention and a time horizon. This website uses assumed constant rates to explain their arithmetic; it does not retrieve account holdings or predict their performance.
The retirement calculator turns current and target ages into a horizon. It then shows deposits, gross growth, modeled balance fees and the terminal balance. That separation prevents new savings from being mislabeled as investment performance.
Monthly deposits are not monthly compounding
Monthly deposits describe the arrival of new money. Compounding describes how a stated rate is translated across time. A model can accept monthly payments with an effective annual return by converting the annual growth factor to an equivalent monthly factor.
For a nominal annual rate compounded monthly, dividing the annual decimal rate by twelve gives the monthly rate. For an effective annual return, use its twelfth-root growth factor instead. The distinction matters even when both quoted percentages look identical.
Timing changes growth opportunities
Twelve end-month deposits of $100 at a 1% monthly rate accumulate to $1,268.25. Beginning-month deposits reach $1,280.93. In both cases, the deposited amount is $1,200. The difference is the additional time invested, not a larger savings contribution.
An existing balance participates for the full horizon. A final deposit may participate for no time at all before the measurement date. Treating every planned deposit as money already present exaggerates the modeled growth.
Keep matching contributions identifiable
The 401(k) growth calculator distinguishes employee deposits from a user-defined employer match. At $60,000 compensation, 6% employee deposits and a 50% match on that eligible amount, the hypothetical annual contributions are $3,600 from the employee and $1,800 from the employer, before any entered cap reduces them.
Those are scenario inputs. They do not verify a specific plan’s eligibility, vesting or current contribution rules. The IRA comparison likewise compares before-tax growth assumptions, not complete account tax outcomes.
Balance fees and inflation answer different questions
A balance fee removes money from the portfolio. Its long-run effect includes both the removed fees and growth those amounts no longer earn. Inflation does not directly remove money from the nominal balance; it changes the purchasing-power unit used to interpret that balance.
For clarity, compare nominal results first, then use the inflation-adjusted figure to consider buying power. Fixed nominal monthly contributions do not automatically keep pace with prices. Increasing them would be a separate assumption.
A smooth path is a limited scenario
Constant returns remove volatility from the calculation. They cannot assess a poor sequence of market returns near retirement, longevity, emergency spending or guaranteed lifetime income. The ending accumulation balance is therefore not a safe-spending recommendation.
Use the withdrawal calculator for a separate spending model. It caps withdrawals when money runs out and reports unmet spending, making the limits of that particular scenario visible.
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