Are you saving enough to achieve your financial goals?

Are you saving enough money to maintain your living standards after retirement? As today’s state pensions are seldom sufficient, it becomes crucial to grow enough wealth during your working life.

The required savings rate depends on your characteristics

Obviously, the intended wealth level (i.e. your savings target) and monthly savings strongly depend on your individual characteristics:

  • How old are you and at what age do you intend to retire?
    • The smaller the remaining time, the higher the monthly savings rate should be (assuming you could not save money by now)
  • Hoch much do you earn, what is your current wealth and how is your savings target defined (e.g. $100,000)?
  • Are you already investing?
    • If the answer is yes: Are you rather risk adverse or risk prone?
  • Are you a shopaholic or living frugal?

Numerical example

To check, whether your current practice is sufficient to achieve your financial goals, I created an interactive calculator that takes into account all important characteristics: Your current and intended retirement age and your monthly savings as well as your wealth and the annual return of your investments (hint: the average stock return over the last 100 years is roughly 7%). Furthermore, you can set a savings or wealth target, respectively.

In addition to your final wealth, the calculator displays an interactive chart that includes your target and states your wealth at a given point in time (you just need to click on the graph).

Example: Let’s assume, your current age is 25 and you want to retire in 30 years (you may also use the calculator to learn when you could buy a house). Your monthly savings rate is $500 and your current wealth amounts to $10,000. Assuming an average annual return of 5%, will you be able to achieve a wealth of $400,000?

Yes, you do! In the graph below, we see that your wealth will amount to $420,000. Notably, even a small increase of your monthly savings rate to $600 would boost your final wealth to roughly $500,000! To see more examples, check the FIinRomania blog from Alexandru who applied my calculator to draw further conclusions.

If you want to learn more about this topic, there is another great article by the Minding My Thirties blog of Liz. In my opinion, a perfect addition.

The Wealth Calculator


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[…] to play around with some retirement calculators. A really cool interactive one you can check out is this one by my friend Jan with Manage Your […]