The Net Worth Forecast calculator allows you to use a number of inputs and various growth rates to model what sort of retirement pot you can expect. Please note that past performance is no indication of future results
The Net Worth Forecast is one of the main tools you'll be using on the Strabo dashboard. We've faithfully recreated it here as a web-widget so that you can play around with some settings. Of course, on your actual dashboard you will be able to use the outputs from your synced and manual accounts.
As the name suggests, this is a widget designed to predict how much of a pot you'll have built up by retirement, taking into account a number of variables. You can use it for other applications but we've specifically designed it for this purpose. Which begs the question - how much should I have at retirement? Fortunately we've written a comprehensive Financial Planning Guide to help you make this decision.
The basic premise is that you need enough to be able to sustain your lifestyle on just the proceeds of your investments, without drawing down the principal. So your Safe Withdrawal Rate will need to exceed your living expenses in retirement.
So once you know what you're looking to build towards in terms of pot size, you can input a few details and see whether you're on track. If you give us your age, forecasted retirement age (bear in mind this will probably have gone up by the time you get there!), current pot size and your contributions, we'll run some basic calculations to see how much this pot will grow.
Bear in mind that even if you have a small pot today, the largest determinant of the size of your retirement fund will be the contributions that you are making regularly over the long term. You've heard the phrase "little and often" and it applies very much so in this case. Those little contributions don't just add to your principal, but they also compound over time and make sure that the growth is far higher.
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Don't believe us? Have a try - put in the size of your current pot, and switch between 0 contributions over time which just relies on compounding alone, and then certain levels, even small ones, of contributions each month. Over the long term: 10, 20, 30, 40 years or more, the difference is staggering.
It's really difficult to convey this concept without really playing with inputs and seeing what you get out. This will start to give you some idea as to the importance of starting saving and investing for retirement as early as possible.
If there's one takeaway we can give you, it's that. Don't forget, for the opportunity to play with more advanced scenarios, save them and use your real accounts as inputs, you can sign up for your own Strabo account using the button above.
