Savings Goal Calculator

How to use the savings goal calculator

1. In Calculate, choose Contribution needed to reach the goal or Time needed with a set contribution.
2. Enter your Savings goal, the Amount already saved (0 if you start from nothing) and the Annual return (%) you expect.
3. For the contribution, set the deadline in Years and Months. For the time, enter your Contribution per period.
4. Choose the Contribution frequency (monthly, bi-weekly, weekly, quarterly or annually), the Compounding of the return and whether Contributions made at the End of each period or the Start of each period.

The tool shows the Contribution per period, the Time to goal, the Total saved (your money), the Interest earned, the Final balance and the Rate per period used. The Balance by year chart separates your contributions from interest; hover or focus a bar to read the values. How it was calculated lists the formulas with your numbers.

The formulas behind the result

The annual rate is first converted into a rate per contribution period. With a nominal rate r compounded m times a year and p contributions a year, the periodic rate is i = (1 + r/m)^(m/p) − 1. With monthly compounding and monthly contributions, this is simply r ÷ 12.

Contribution needed. Your current savings grow to PV × (1 + i)^n on their own. The rest of the goal must come from the contributions, whose future value is PMT × ((1 + i)^n − 1) ÷ i. Solving for the payment:

PMT = (FV − PV × (1 + i)^n) ÷ [((1 + i)^n − 1) ÷ i]

For contributions at the start of each period, the divisor is multiplied by (1 + i). The payment is rounded up to the cent, so the final balance is always at least the goal.

Time to goal. The same equation is solved for n with logarithms:

n = ln((FV + PMT ÷ i) ÷ (PV + PMT ÷ i)) ÷ ln(1 + i)

The result is rounded up to a whole number of contributions and shown in years and months.

Example

You want $50,000 in 5 years, you already have $5,000, and you expect 4% a year compounded monthly. The $5,000 grows to about $6,105 by itself. The remaining $43,895 requires $662.08 a month for 60 months. You put in $44,725 in total (including the initial $5,000) and earn about $5,275 in interest. With no return at all, you would need $750 a month.

Tips and limits

• Be conservative with the return: a savings account, a GIC and a stock portfolio have very different rates and risks. Try several rates to see the range.
• Returns are assumed constant. Real investments go up and down, and the tool does not model fees, taxes (for example in a TFSA versus a taxable account) or inflation.
• Increasing the frequency (weekly instead of monthly) barely changes the total; starting earlier has a much bigger effect.

The results are estimates for planning, not financial advice.