Is 5% return realistic for a savings goal?

5% is conservative — fits a high-yield savings account or short-term bonds. For 5-10 year goals in stocks, 6-7% is more typical.

Should I include inflation?

For simple goals (down payment in 5 years), no. For long-horizon goals (college in 15 years), bump the target by ~3%/year to keep purchasing power.

Where should I park short-term savings?

For under 12 months: FDIC-insured high-yield savings or a money-market account. For 1–3 years: short-term Treasury bills or CDs ladder. The FDIC insurance limit is $250,000 per depositor per insured bank.

Should I save or invest for this goal?

A common rule: under 3 years → savings account or short bonds; 3–7 years → mixed; over 7 years → stock-heavy portfolio. The shorter the horizon, the more you should prioritize capital preservation over growth.

Savings Goal Calculator — embedded

Result

Monthly savings needed

$640.87

Total you'll contribute$43,452.33
Interest earned$6,547.67
Current balance grows tobefore adding monthly contributions$6,416.79
Time to goal60 months

Your plan (5% return)

Reaches $50,000.00 in 5 years.

$640.87/mo

Conservative (HYSA, ~4%)

FDIC-insured savings — appropriate under ~3-year horizon.

$662.08/mo

Moderate (mixed, ~6%)

$619.98/mo

Aggressive (equities, ~8%)

Higher monthly variance; more appropriate >7-year horizon.

$579.10/mo

Source: SEC Investor.gov Savings Goal Calculator methodology; future-value-of-annuity formula (Brigham & Houston, Ch. 5).

Not financial advice — Constant-return assumption; tax drag on interest and account fees not modeled. For tuition/healthcare/housing inflation typically exceeds CPI — increase target by 4–6%/yr in those categories.

How to use this calculator

Enter your savings goal — be specific about the dollar amount.
Type your current balance for this goal (separate accounts is best).
Set the deadline in years.
Pick a return rate matching where the money lives (HYSA, brokerage, etc.).

About this tool

Set a savings goal — house down payment, car, big trip, kid's college — and the calculator works backwards: given your current balance, time horizon, and expected return, what monthly contribution gets you there? Lower the expected return for safer goals (a savings account: 1-5%), raise it for aggressive ones (a brokerage account in stocks: 6-8%). The math accounts for compounding on both your existing balance and the new contributions, so the monthly number is realistic, not just (target ÷ months).

How it works — the formula

PMT = (FV − PV·(1+r)^n) · r / ((1+r)^n − 1)

Solving the future-value-of-an-annuity equation for the periodic deposit (PMT) needed to reach a target FV from current balance PV in n periods at rate r. For monthly contributions r is the monthly rate (annual ÷ 12) and n is months. Match the compounding frequency to your contribution cadence to keep the math accurate.

Sources: SEC Investor.gov — Savings Goal Calculator and methodology · FDIC — Deposit Insurance Coverage · Brigham EF & Houston JF — Fundamentals of Financial Management, Ch. 5 (TVM)

Worked examples

Example 1

House down payment, 5 years

Inputs:: goal = $80,000, current = $10,000, r = 4.5%/yr, t = 5 years
Output:: PMT ≈ $1,005/month

Example 2

New car in 3 years

Inputs:: goal = $30,000, current = $0, r = 5%/yr, t = 3 years
Output:: PMT ≈ $774/month

Example 3

529 college fund

Inputs:: goal = $120,000, current = $5,000, r = 6%/yr, t = 15 years
Output:: PMT ≈ $370/month

Limitations

A constant rate is rarely realistic for goals over 5 years — equity and bond returns vary.
Tax drag (interest on taxable savings) and account fees are not modeled.
For tuition, healthcare, and housing the inflation rate routinely exceeds general CPI — bump the goal by 4–6%/yr in those categories.
Withdrawal penalties on tax-advantaged accounts (e.g., 10% on 401(k) early withdrawals) are not accounted for.

Savings projections assume a constant return. This calculator does not provide financial advice — for goals tied to taxes (529, HSA, IRA), consult a CFP® professional or tax advisor.