Thinking Retirement? How Much Should You Deposit Now To Collect Later?

thinking retirementRetirement is a reality for all of us. Some future time when we leave the work force in pursuit of leisure.

Sure, a fifty-year-old may face retirement sooner, but eventually so will a twenty-year old. It’s just a matter of time that all of us must face retirement; despite our current age or denials.

Fair enough.

So do you want to plan for retirement? Is it important for you to ensure that you will collect some amount of revenue through those twilight years that you can count on receiving continually over some period of time to spend however?

It all boils down to setting money aside now that you can collect later.

How much you should be setting aside is one of dozens of calculations ProAPOD has included in its iCalculator real estate calculator. Certainly not as a replacement for sound financial planning, but a handy way for you to at least get enough of the idea to start considering it.


Let’s say you’re thinking about retiring in fifteen years and would like to collect $500 per month for a period of ten years beginning with your retirement. Your local provides an account that pays an annual interest rate of 1.05% compounded daily. How much should each of your deposits be for you to achieve your future objective?

This is what’s known as an annuity (a series of equal cash flows made at equal time intervals). In this case we will be solving the annuity deposit contribution you must make in order for you to collect a desired future annuity payment. Compounding is the mathematical procedure for determining future value.

iCalculator makes this calculation for annuities quite easily with seven form entries.

Illustration (click image to enlarge)



You must start making monthly deposits of $307.64 into an account that earns an annual rate of 1.05% compounded daily for the next fifteen years in order for you to collect monthly payments of $500 for a duration of 10 years.

Hopefully you can find an account with a higher yield to reduce the deposit amount required. And of course, you want to consider some financial counseling. But you get the idea.

So You Know

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James Kobzeff

James Kobzeff has over thirty years experience as a realtor and investment real estate specialist. He is the developer of ProAPOD real estate investment software and freely shares his real estate investing articles.