Savings goal calculator

Two numbers, and the gap between them

The calculator always shows both the invested answer and the plain-division answer, because the distance between them is the entire case for investing rather than saving. Over 30 years at 7%, the gap is enormous: $820 a month versus $2,778, with growth supplying $704,911 of the million. You deposit under a third of the target and the market supplies the rest.

Over three years the same machinery barely registers. A $30,000 goal three years out needs $751 a month invested at 7% against $833 a month in cash — growth covers about 10% of it, and only if the three years happen to cooperate. Compounding is not a service you subscribe to; it is a function of time, and short deadlines simply do not have enough of it. The mechanics of why the curve is nearly flat at the start are in compound interest.

Short deadlines: use the cash number

If the deadline is inside five years — a house down payment, a wedding, a career break — plan with the no-growth figure and hold the money somewhere boring. The expected return on stocks over three years is positive; the range of outcomes includes being down 30% in the month you need to write the check. Trading a 10% discount on your monthly deposit for that risk is a bad trade, and it is the single most common way people wreck a short-horizon goal.

The same logic applies before any of this starts. A funded emergency fund comes first, in cash, because otherwise the first unexpected $3,000 bill turns into debt and the goal stalls. Only money you can genuinely leave alone for a decade or more should be typed into this calculator at 7%.

When the monthly number is impossible

Frequently it is, and that is useful information rather than a failure. Four dials exist, and the deadline is usually the one with the most give. Holding the $1,000,000 target and moving only the deadline:

From $0, 7% annual return compounded monthly, contributions at month-end.

Read the middle column and then the right one. Ten extra years cuts the monthly requirement from $1,920 to $820, and cuts the total you ever deposit by $165,628 — you reach the same million having paid substantially less for it. The second dial is the starting amount: enter $100,000 already saved against that 30-year million and the requirement collapses to $154 a month, which is why the first $100k gets talked about the way it does. The third is income, since the monthly figure has to come from somewhere, which makes this a question about your savings rate long before it is a question about your portfolio. The fourth, lowering the target, is legitimate more often than people admit: most goals are estimates wearing a precise number.

What the calculator assumes, and what it ignores

It assumes a constant return compounded monthly, deposits made at the end of each month, every month, without interruption, and no taxes or fees. That last part is a fair approximation inside a 401(k) or Roth IRA and an optimistic one in a taxable account. If you pay an advisory fee, subtract it from the rate before typing it — entering 6% instead of 7% is how you make a 1% fee visible.

Three things it deliberately does not model. Inflation: the answer is in whatever dollars your rate implies, so use a real (after-inflation) rate near 7% to keep the target in today's money, and remember that a $1,000,000 goal 30 years out is a smaller goal than it sounds. Sequence of returns: markets deliver averages unevenly, and a downturn in the final years of a long goal is the expensive one. Irregular contributions: raises, bonuses, and tax refunds are not in the model, and in practice they are how most people beat the required monthly figure without ever feeling like they did.

Turning the answer into a standing order

A required monthly deposit only works if it is automatic and it goes out first. Set the transfer for the day after payday, treat it as a fixed bill rather than a residual, and re-run this page once a year to check the number against reality — the arithmetic here is the easy half, and budgeting is where the number actually gets funded. Where the money goes once transferred is a separate question, answered for most people by low-cost index funds held through the boring middle years.

Two related tools: the compound interest calculator runs the same math forwards, showing what a given monthly deposit becomes year by year, and the millionaire calculator solves for the date you cross seven figures rather than the deposit. For the full route from nothing to a million, start at how to make a million dollars.

Educational content, not financial, tax, or legal advice. Figures are illustrations based on stated assumptions, not guarantees; markets involve risk, including loss of principal.