Direct answer
The required rate of return is the annualized growth rate your money needs to achieve to reach a specific savings goal by a specific date. It is calculated using the compound growth formula, solving for the rate.
The formula
For a single goal, Aspire's shared projection engine treats twelve monthly contributions as one annual amount added at year-end. For whole-year horizons and a nonzero annual rate, solve:
FV = PV × (1 + r)^n + 12 × PMT × ((1 + r)^n − 1) / r
Where:
- FV = the goal's future cost at its deadline.
- PV = the starting resources assigned to the goal.
- PMT = the monthly contribution input; 12 × PMT is the annual amount.
- n = years until the goal.
- r = the annual resource-growth assumption as a decimal, not a percentage.
At a zero rate, the relationship is FV = PV + 12 × PMT × n. With contributions, the engine solves for the rate numerically. This year-end convention is an approximation: it doesn't compound each deposit from its actual month. Fractional horizons use the engine's existing annuity interpolation.
Without contributions and with positive starting resources and a future deadline, the equation simplifies to:
r = (FV / PV)^(1 / n) − 1
The required-return calculator displays the no-contribution rate and a separate monthly contribution estimate at zero growth. It doesn't accept a custom contribution input. The contribution example below illustrates the shared engine; use the Simulator to explore a contribution path.
Aspire Rate answers a different question: how fast the goal's cost is modeled to grow, at these assumptions. It isn't the required investment return.
Step-by-step
Define your goal amount (FV). What will the future cost be? For a home, use a source-backed future cost estimate. For retirement, use your target nest egg.
Count what you have now (PV). Include the assets you would realistically use to reach this goal.
Set your time horizon (n). How many years until you need the money?
Add monthly contributions (PMT). How much can you add each month?
Solve for r. The required rate of return is the annualized growth rate that closes the gap between what you have, what you're adding, and what you need.
Worked example
This hypothetical example holds the future goal at $150,000, starts with $50,000 and uses a ten-year horizon. No further cost-growth adjustment is applied. All results below are at these assumptions.
Without contributions, the required annual growth rate is about 11.61% at these assumptions: (150,000 / 50,000)^(1 / 10) − 1.
With $500/month contributions modeled as $6,000 added at each year-end, the required annual growth rate is about 4.37% at these assumptions. Solving before rounding produces a modeled value of $150,000 at year ten.
At zero growth, the same starting resources would need about $833.33/month at these assumptions, modeled as annual year-end contributions. This is the separate contribution estimate shown by the required return calculator, alongside the no-contribution return result. Its optional inflation adjustment increases the goal's future cost before either calculation.
What this doesn't do
This calculation does not predict the future. It does not tell you what to invest in. It does not guarantee that any asset will achieve the required rate. It measures the gap between where you are and where you need to be, at these assumptions.
If your required rate is well above what you realistically expect from your portfolio, the useful response is not to chase higher returns. It is to change the inputs: more time, more savings, a smaller target, or a different goal.