Methodology
Formulas, assumptions, and exclusions behind each estimate.
Minimum wage references
Federal starting point
The default is $7.25, the federal minimum for covered, nonexempt workers. When federal and state laws both apply, the higher applicable standard generally controls.
State and regional choices
References follow the U.S. Department of Labor summary updated July 1, 2026. States without a higher general rate use $7.25. New York and Oregon include regional options.
Local rules, employer size, industry, age, tips, exemptions, and scheduled increases may differ. Use your actual wage when known.
U.S. state minimum wages Federal minimum wage FAQGross work income
Estimated workdays per year
Weekly workdays are multiplied by 52 and adjusted for months worked. Five days a week for nine months gives
5 × 52 × (9 ÷ 12) = 195 workdays.
Annual and monthly income
Annual income = hourly wage × hours per day × estimated workdays per year. Monthly income is the annual amount divided by 12.
Annual wage growth
Current income is the first-year baseline. From year two, WageBloom applies
monthly income for the year = first-year monthly income × (1 + annual wage growth)^elapsed years
every 12 months. In income-rate mode, the monthly contribution grows at the same rate while the saving rate stays constant.
Work hours and days remain constant.
Overtime, leave, bonuses, taxes, benefits, unpaid breaks, and changing schedules are excluded.
Monthly contribution
Income-rate mode
Monthly contribution for the year = monthly gross income for the year × saving rate.
The rate ranges from 0% to 100% and stays constant as wages change.
Fixed-amount mode
Enter a fixed amount when your monthly budget is known.
Annual growth for fixed contributions
This applies only in fixed-amount mode. The first-year amount stays constant for 12 months, then changes yearly using
monthly contribution for the year = first-year contribution × (1 + annual growth)^elapsed years.
Skipped deposits, withdrawals, and irregular changes are excluded.
Monthly compounding
Converting an annual return
monthly rate = (1 + annual return)^(1 ÷ 12) − 1 makes 12 compounded months match the annual assumption.
End-of-month contribution
Each month applies return, then adds the contribution:
new balance = previous balance × (1 + monthly rate) + contribution for that year. Beginning-of-month
and irregular deposits produce different results.
Negative returns
Returns down to -20% are accepted. Estimated assets may finish below principal.
Inflation-adjusted value
Today’s value is nominal assets ÷ (1 + annual inflation)^investment years. At 2% inflation, a 30-year
nominal balance is divided by about 1.81.
Inflation and spending patterns vary. This is a purchasing-power comparison, not an expense forecast.
Target asset reverse calculation
Required monthly contribution
The target is a future nominal amount. WageBloom subtracts the future value of current assets, then divides the remainder by the month-end contribution factor.
Required first-year contribution = (target − future value of current assets) ÷ growth-adjusted contribution factor.
When growth and return are 0%, the factor equals the contribution months.
Difference from the current plan
The planner shows the gap from the current plan. Saving rate is
required monthly contribution ÷ average monthly gross income. A rate above 100% may require a different target or horizon.
Federal baseline example
Defaults are $7.25 per hour, eight hours a day, five days a week, 12 months, 30% saving, 0% growth, 30 years, 6% return, and 2% inflation.
Swipe horizontally to view the full table
| Measure | Calculated result | Meaning |
|---|---|---|
| Annual gross income | $15,080 | Full-time schedule at the federal baseline |
| Monthly contribution | $377 | 30% of average monthly gross income |
| Total principal | $135,720 | Contributions over 30 years |
| Nominal assets after 30 years | about $367,391 | Assumes a constant 6% annual return |
| Inflation-adjusted value | about $202,826 | Assumes 2% annual inflation |
Figures may be rounded. Input changes recalculate with the same formulas.
What is not included
- Federal, state, and local income taxes, payroll taxes, credits, and deductions
- Overtime, tips, bonuses, paid leave, benefits, job changes, and wage changes outside the entered steady rate
- Investment taxes, trading costs, fund fees, and advisory fees
- Year-to-year return changes, sequence risk, losses, and market shocks
- Contribution changes outside the entered steady rate, withdrawals, emergency funds, and debt repayment
- Local minimum wage ordinances and individual coverage determinations
Use the output as a starting point, not financial, tax, legal, or employment advice.