Best Retirement Calculators to plan Retirement
It is said that a goal without a plan is just a wish. This holds true even for retirement planning. You dream of a peaceful retired life. To achieve that you must plan for your golden years well in time. Various retirement tools make your task easier. For example, a retirement calculator helps you calculate in advance how much you would need to save so that you can have a comfortable post-retirement life. Likewise, it can help you with different retirement-related calculations.
Advantages of retirement calculators
- It helps you plan your retirement finances well before your retirement
- It inculcates an active habit of saving in you
- It helps you build an adequate retirement corpus which will take care of all your needs after retirement
- It gives you a sense of financial security
Retirement Calculators to help you Plan your Retirement smartly
1. Cost of living – Retirement Calculator
Your financial situation is likely to change after you retire. This is because you would no longer be employed. Hence, you must get an idea of your expenses in the future. A cost of living calculator helps you calculate the exact cost of living expenses after retirement. Such a calculator enables you to set your saving budget. Moreover, it also lets you compare your expenses during your pre-retirement and post-retirement life.
The cost of living calculator requires you to enter your sources of income and expenses. The list of income includes wages and salary, social security benefits, dividends from stocks, interest on savings accounts and so on. The list of expenses includes house rents, loans, taxes, repairs and maintenance costs, cost of education, childcare, entertainment and recreation budget and other utilities.
2. Retirement Savings Calculator
A retirement savings calculator helps you evaluate your savings to decide if they are sufficient for your retired life. A good understanding of your current savings will also help you decide if you must increase your investments.
Such a calculator needs you to enter details like your current age, annual income earned, spouse’s annual income (if applicable), current annual savings, balance savings for retirement, pension benefits on retirement and the age of retirement.
3. Savings Plan Calculator
Retirement is a fact of life and it is wise to prepare for it while the sun is still bright. The sooner you make efforts to save for your retirement, the more comfortable will be your post-retirement life. A savings plan calculator helps you understand how much you would accumulate until you retire. It also proves that the later you start saving, the lesser you will have.
A savings plan calculator needs you to enter details such as your age, the expected age of retirement, current annual savings, increase or decrease in the annual income, etc. This calculator also requires you to make a few tax assumptions like return on savings before tax, marginal bracket for tax and savings frequency.
4. Investment Return Calculator
You must never ignore taxes and inflation while estimating your investment returns. The investment return calculator helps you understand the impact of taxes and inflation on your returns. This ensures you get a realistic view of your future income, and you plan accordingly.
The calculation depends on the rates and assumptions made. It includes details like before tax return on savings, federal and state marginal tax bracket, if you want to itemize deductions or no and an assumption of the rate of inflation.
5. Pre-retirement Calculator
To each his own – even when it comes to retirement planning. For some, the goal can be financial security, while for others, it may be an entertaining life. And, the cost of each goal would be different. With a pre-retirement calculator, you can know how much your goal costs and how much you would need for retirement goal.
Such a calculator asks for your current age, current annual income and spouse’s annual income, the desired age of retirement, the number of years of service before retiring and current savings for retirement. You will also have to enter certain assumed figures such as the expected inflation rate.
To sum it up
Planning your post-retirement life properly is important because you are bracing yourself for a life of uncertainties that can be filled with financial challenges. However, if you use retirement calculators optimally and make your plans accordingly, you should not face any difficulties after you retire.
Still unsure about embarking on the journey of retirement planning? Approach financial advisors today! They will guide you through the entire process and ensure you walk into the sunset of life with pride.
what about post-retirement inflation
If an individual saves half of their annual salary and invests it in a financial instrument that can at least match the rate of inflation for growth, this can provide a viable solution. The money accumulated between the ages of 30 and 58 can potentially sustain them for 28 years post-retirement. It’s essential for everyone to tailor their lifestyle to their current income.