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MoneyBasis

Formulas and assumptions

How MoneyBasis calculates results

Explore the formulas, assumptions and sources behind each estimate. Your inputs provide the starting point; the calculation runs in your browser.

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Savings Goal Calculator

What it estimates

This calculator estimates how much you may need to save each month to reach a target amount based on current savings, time horizon and a return assumption.

How it calculates

Future gap = Goal − Current savings × (1 + r)^n
Monthly contribution = max(0, Future gap) / Contribution growth factor
Contribution growth factor = ((1 + r)^n − 1) / r; at r = 0, use n

MoneyBasis first projects the savings you already have. It then calculates the recurring end-of-month contribution needed to cover the remaining future gap. Here r is the nominal annual return divided by 12, and n is the number of months. The return is an assumption, not a forecast.

Inputs

Goal amount · Current savings · Time horizon · Expected return

Included / not modeled

Included

  • Growth of current savings
  • End-of-month contributions toward the future gap
  • Constant assumed return

Not modeled

  • Taxes and fees
  • Inflation
  • Changing returns
Assumptions & limitations
  • Returns compound monthly and stay constant at the rate you enter.
  • You already have some savings that continues to earn the same assumed return.

Sources

Open Savings Goal calculator →