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Retirement Planning Calculator

A retirement planning calculator is available on a lot of financial and investment company websites. The best ones I have found are available through AARP and MyCalculators.

Before you use a retirement planning calculator, it is important to consider the various aspects of retirement planning.

Today, Social Security will only provide 40-50% of the income you will probably need in retirement. You will need to consider all other options for additional income.

Perhaps you will have a defined benefit company pension, which a very small percentage of people today will have.

Otherwise, your additional income will need to come from your personal savings and earned income.

Life expectancy continues to rise so your income will need to last longer and inflation will take away from your nest egg also.

Although some of your current expenses will decrease in retirement, you need to consider that health insurance, prescription drugs and travel expenses will probably increase.

You need to factor in to your retirement planning those unexpected life experiences that tend to use more cash than you planned. Such things as illness, caring for elderly parents or temporary loss of income if earned income was included in your retirement planning.

You want the retirement calculator to be able to tell you how long your retirement income streams and assets will last. You also need the calculator to consider any pension you will be receiving and also any Social Security. You also want to be able to do "what if" analyses to evaluate different options.

AARP Retirement Calculator

The AARP retirement planning calculator enables you to enter the information for you and for your spouse separately. (A new window will open. To return to this page just close the new window by clicking the 'X' button in the upper right hand corner of the new browser window.)

When you are doing retirement planning you need to factor in the effects of inflation. This calculator does that.

This retirement calculator allows you to factor in any pension you would receive and also any Social Security. In addition, you can see the impact of having a job in retirement or starting your own business.

The results of the calculation will tell you what your available funding will be compared to your lifestyle needs.

My Preferred Calculators

The retirement planning calculators I prefer to use are found at MyCalculators.com. (A new window will open. To return to this page just close the new window by clicking the 'X' button in the upper right hand corner of the new browser window.)

There are several different types of calculators at that site.

They have a savings calculator that will tell you how much you need to save each month for retirement. Here are some of the questions that generally can be answered by a savings calculator.

If I have $10,000 today in a savings account of some sort and expect an annual interest rate of 10% compounded monthly, how much would the value of my savings account be at the end of 5 years? Or, what would the value be in 5 years, if I contributed an additional $100 per month during those 5 years?

Assume the amount you would have in 5 years suits your needs in today's dollars. Unfortunately, inflation takes away a portion of your earnings.

The calculator will then tell you what options you have and puts those options in real dollars and cents, or, in the case of interest rate, as a percentage.

For example, you could contribute more, either initially or periodically, to benefit from the compounding interest. Or, you could choose an investment that would give a higher rate of return. Or, you could settle for less. The choice is yours.

The retirement planning calculator that identifies how much you can withdraw each year in retirement is the retirement withdrawal calculator. You provide:

  • the number of years until you retire
  • how many years you expect to live in retirement
  • your expected annual interest rate on your savings
  • the expected inflation rate
  • how much money you expect to have at the start of your retirement
  • how much you want to have left for your heirs

You will then get a summary report that shows you, by year, your beginning balance, your interest earned, your withdrawal amount and the ending balance at the end of each year.

I hope you enjoy using a retirement planning calculator to help you do your planning for retirement.

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