I am trying to create a simple retirement calculator. My inputs are:
- annual income required during retirement (before inflation)
- inflation rate
- number of years of retirement
- yield on investment
I want to calculate the amount I need initially (retirement starting cash).
The total income required over the number of years is
total required cash = annual income required * (1 + inflation rate ^ number of years) / (-inflation rate)
(thanks @JB King)
Then, I believe this is essentially an annuity payment calculation, except that the payment amount increases with inflation each year.
Is this correct?
How can I calculate the initial amount required?