Four questions decide most savings plans: what you need to retire on, how much to put aside each month for a goal, how much cash to keep for emergencies, and what a pension has to reach. Each guide below answers one of them with the formula and a worked example.
Start from the income you want, not the pot. A widely used starting point is the 4% rule: a portfolio can support roughly 4% of its starting value each year, adjusted for inflation, with a reasonable chance of lasting a long retirement. Wanting $50,000 a year implies a target of $50,000 / 0.04 = $1,250,000. Assuming a more cautious 3.5% raises the target to $1,428,571, which shows how sensitive the number is to that single assumption.
Rearrange the future value of an annuity formula to solve for the payment. To reach 500,000 in 8 years at a 6% return you would need about 4,071 a month. The two levers are the amount and the time, and time does far more work, which is why starting earlier beats saving harder later.
Three to six months of essential expenses is the usual guidance, measured against what you must spend rather than what you normally spend. On 4,000 a month of essentials that is 12,000 to 24,000. Households with variable income or a single earner sit at the higher end.
Education inflation has historically run well above general inflation. A course costing 500,000 today would cost about 1,586,085 in 15 years at 8% education inflation. Planning against today's price is the most common error in education saving.
Each guide answers one planning question directly, shows the formula, and works a real example through to the answer.
The 4% rule, the corpus formula, and how much the withdrawal rate assumption really moves the target.
Sizing a pot from the income you want it to produce, after deducting any guaranteed pension.
Projecting a balance forward with contributions and an employer match, at 5, 20 and 30 years.
Assets minus liabilities, what people forget to count, and why the trend matters more than the number.
Sizing against essential expenses rather than income, and who should hold more than six months.
Solving the future value formula for the payment, and why time beats contribution size.
Inflating fees at education inflation rather than general inflation, and funding the real number.
The monthly amount that reaches an education target, and what a five year delay costs.
What regular saving from birth compounds to by age 18, and how much of it is growth.
Sizing cover from obligations rather than a rule of thumb, and what actually drives a premium.
A map of which calculation matters at each life stage, from a first salary through to retirement.