How this calculator works
A million dollars is not a magic number, but it is a useful milestone: at a 4% withdrawal rate it supports about $40,000 a year before tax. The path there depends on three things: what you start with, what you add each month and what the money earns. This calculator compounds the starting balance and each monthly deposit at a constant annual return. In time mode it finds the month the balance passes one million. In deposit mode it finds the monthly deposit that reaches one million by a chosen year. A long-run return of 6% to 7% before inflation is a common planning assumption for a diversified portfolio, but returns are not constant: a bad decade early on hurts more than the same average spread evenly. The inflation figure converts one million at the end date into today's money, so you can see how much purchasing power the milestone actually represents. The model ignores tax, fees and any withdrawals.
Formula
Monthly rate i = annual return / 12. Balance after n months = P(1+i)^n + D((1+i)^n - 1)/i. Time to one million: n = ln((1,000,000 + D/i)/(P + D/i)) / ln(1+i). Deposit needed: D = (1,000,000 - P(1+i)^n) x i / ((1+i)^n - 1). One million in today's money = 1,000,000 / (1 + inflation)^years. Interest = 1,000,000 - starting amount - total deposits.
Worked example
Starting with $10,000 and adding $500 a month at 6% a year takes 38.47 years to pass one million: you deposit about $240,800 in total and earn about $759,200 of interest. Saving $1,000 a month instead reaches the milestone in 29.12 years. To get there in 25 years, the monthly deposit would need to be about $1,378.58.
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Frequently asked questions
Is a million enough to retire?
It depends on spending. At a 4% withdrawal rate, a million supports about $40,000 a year before tax. If you spend more, you need a larger balance or other income such as a pension or government benefit.
Should I use a nominal or real return?
The calculator takes a nominal return and separately shows the target in today's money using the inflation rate. Do not subtract inflation from the return yourself as well, or you will count it twice.
Why does the result change so much with the deposit?
Early deposits have decades to compound. Raising the monthly deposit by $500 shortens the timeline by more than eleven years in the example, because every extra dollar earns interest for the whole remaining period.
What return should I assume?
Be conservative for planning. A diversified portfolio has historically returned roughly 7% a year before inflation over long periods, but that average includes good and bad decades, and fees reduce it. Test a lower return to see how sensitive your plan is.
Does this include a pension or employer match?
Not directly. Add an employer match to the monthly deposit, or model the pension separately and add its value to the starting amount if it will be available at the same time.