The balance grows month by month: each month it earns the annual return ÷ 12 and then your contribution is added. If you set a yearly contribution increase, the monthly amount rises by that percentage each year. At retirement, the yearly income is the balance times the withdrawal rate; 4% is the widely quoted starting point from the "4% rule". The figures are in today's numbers only if you enter a real (after-inflation) return, for example 4 to 5% instead of 6 to 7%.
Example: starting with $50,000 at age 35 and adding $800 a month at a 6% return until age 65 grows to roughly $1.1 million. A 4% withdrawal would then support about $44,000 a year, or $3,700 a month.
Long-run stock-heavy portfolios have historically returned roughly 6 to 7% after inflation, but returns are never guaranteed. Try lower values such as 4% to see a cautious case.
It is a rule of thumb based on historical 30-year retirements, not a guarantee. A longer retirement or poor early returns may call for a lower rate.
No. It only models your own savings. Taxes on withdrawals and other income will change what you actually receive.
See also: compound interest calculator · savings goal calculator · loan calculator