Savings Goal Calculator

What this calculator does

This calculator solves the inverse of a compound-interest projection: given a target amount, how much do you need to save each month? It accounts for your current savings (which keep growing on their own) and the expected return on your invested savings.

The math

Future value of a savings plan is the sum of two pieces: the starting balance compounding on its own, plus the future value of an annuity of monthly contributions.

FV = P × (1 + r)^n + PMT × ((1 + r)^n − 1) / r

Solving for PMT (with monthly r and n = months):

PMT = (FV − P × (1+r)^n) / (((1+r)^n − 1) / r)

Pick a realistic return rate

Use 4–5% if your savings are in a HYSA or short-term CD. Use 6–8% for a diversified stock-heavy portfolio over a long horizon. Don't plug in 12% — that overstates likely returns and produces an unrealistically low monthly contribution.

Tips and common mistakes

• Automate the contribution. Set up an automatic transfer right after payday so the money moves before you can spend it.
• Bump the contribution with raises. When your salary goes up, increase the savings transfer too.
• Watch fees. A 1% annual fee compounds against you. Index funds typically charge 0.03–0.10% — pick those.
• Account for taxes. Returns in a taxable account are reduced by capital gains and dividend taxes. Tax-advantaged accounts (401(k), IRA) shield those.

Frequently asked questions

Where should I keep my savings?

For goals 1–3 years out, a high-yield savings account (HYSA) or short-term CD keeps the money liquid and protected. For 5+ year goals, a diversified portfolio of low-cost index funds historically outperforms cash. The riskier the time horizon, the more conservative the vehicle should be.

What's a high-yield savings account?

A HYSA is a federally insured (FDIC) bank account that pays meaningfully more interest than a traditional checking account — typically 4–5% APY in 2024–2026, vs near-zero for big-bank checking. Online banks like Ally, Marcus, and Discover are the usual leaders.

Should I save in a brokerage or HYSA?

Depends on the time horizon and tax considerations. For under 3 years, HYSA. For 5+ years, a taxable brokerage with index funds. For retirement (decades), tax-advantaged accounts (401(k), IRA, Roth IRA) come first.

How does inflation affect my goal?

If you set a $50,000 goal today and reach it in 10 years, that $50,000 will buy less than today due to inflation. To preserve purchasing power, either set the goal in today's dollars and use a real (inflation-adjusted) return rate, or set the goal in future dollars and use a nominal return rate.