Savings Rate for a Target
Determines the regular savings rate that leads to a desired final wealth – with or without starting capital.
Enter your own numbers and press "Calculate" – or load an example on the right; "Type in" replays it on the device.
Good news for young savers: with a long horizon a surprisingly small rate is enough for a big goal – every year earlier lowers the necessary savings rate further.
→ Story & full explanation: Savings rate for the desired pension
Time beats money dramatically: the daughter reaches the same goal with a fraction of the father's rate. Quadrupling the saving time does not demand a quarter, but less than a twentieth of the rate.
→ Story & full explanation: The daughter's head start in time
A repayment substitute via a fund only pays off if its return reliably beats the loan rate – otherwise the borrower carries the risk and ends up worse off.
The difference between the premium paid and the mathematically required savings premium reveals the ongoing costs of the policy – that is how you see what really works for you.
→ Story & full explanation: Hidden costs of a unit-linked policy
Here the final-value formula is solved for the rate: you divide the target by the compounding factor (qⁿ−1)/(q−1), which shows the multiple to which a rate of $1 grows. Takeaway: the longer n, the larger this factor – and the smaller the rate needed.
Solving the annuity final-value formula for the rate.