Using This Retirement Savings Calculator
After answering a short series of questions, you will receive a detailed retirement analysis that you can use to help evaluate the current level of your retirement savings and decide what changes might be beneficial to your overall retirement planning strategy. Periodic reviews of your retirement savings strategies with your financial professional are important to monitor market changes and address changes in your financial goals.
About Your Inputs
Our Retirement Savings Calculator begins by asking you questions about your current income/savings, pension (if you have one), key assumptions and your Social Security benefits. The longevity of your retirement savings depends on a number of different factors, such as your retirement age, projected retirement expenses, changes in rates of return on your investments and inflation. This calculator asks you to make some assumptions (e.g., pre- and post-retirement investment return rates) to analyze if your current retirement savings may be sufficient to last throughout your entire period of retirement.
You will be asked to provide the following personal information:
- Your current age
- Your current annual income
- Your spouse’s annual income (if applicable)
- Your current retirement savings (total money from your checking, savings and investments)
- Your current annual savings amount
- Percentage of current annual savings increase
You will be asked to make a series of assumptions about your:
- Expected inflation rate
- Desired retirement age and number of years of retirement income
- Percentage of income replacement at retirement (For example, do you want 75% of your current annual income during your retirement?
- Pre- and post-retirement annual returns on your investments
Your total retirement income includes any available pension and Social Security. Our Retirement Savings Calculator asks for your annual pension benefit at retirement and whether it increases with inflation. In addition, you can choose whether or not to include Social Security benefits in your retirement analysis results. The calculator estimates your monthly Social Security benefit given the income and marital status you input. However, you can override this estimated amount by including a different monthly amount in today’s dollars.
About Your Results
Retirement Savings FAQs
How Much Money Do You Need for Retirement?
Arriving at an answer to this question may not be immediately obvious because it depends on several variables related to your retirement objectives. Do you envision your retirement lifestyle costing more or less than what you spend now? If you want to increase the amount of domestic or international travel you enjoy during retirement, you will likely need additional money for these adventures. However, if you want to move into a smaller house or condo to simplify your life after you retire, you may not need as much money on an annual basis as you do now.
It can be helpful to imagine what your expected expenses in retirement might be and develop a retirement budget to estimate the level of income you think you'll need. Remember to include unexpected costs like taking care of elderly parents, special destination weddings, inflation and potential investment losses. After you have a rough estimate of your retirement budget, you can more accurately determine the percentage of income replacement at retirement, one of the assumptions in our Retirement Savings Calculator. Depending on your situation, a scaled-down lifestyle may need only 80% of your current income, whereas opening an antique store as a brand new business venture could bump that up to 150%.
Are You Saving Enough for Retirement?
It's never too soon to start saving for retirement. When you have a spouse, children, a mortgage and college tuition to think about, competing financial priorities can make it more challenging to save for your retirement years. However, each year you delay saving for your retirement means facing the financial burden of catching up with your savings down the road if you want to achieve your retirement objectives. Are you curious about whether your retirement savings are on track for your age? Here are some average retirement savings by age to help you gauge your progress. By using our Retirement Savings Calculator, you can figure out how long your current savings might last you in retirement and what additional annual savings may be necessary to meet your goals.
How Much Social Security Will You Get When You Retire?
The amount of your Social Security benefit is a function of your full (or normal) retirement age. If you were born in 1960 or after, your normal retirement age — when you are eligible to receive full or unreduced Social Security benefits — is 67. When you choose to retire is central to your retirement planning strategy because it activates your various streams of retirement income: drawing upon Social Security and your pension, if you have one, as well as beginning withdrawals from your other retirement accounts, such as your 401(k) or IRA, and other possible income sources like annuities. With the right planning, you may be able to retire early and depend on alternative sources of retirement income until you reach your normal retirement age, at which point you can start collecting your full Social Security benefits. You also can increase your Social Security benefit amount by waiting beyond your full retirement age to retire. However, the benefit increase stops when you reach age 70. Access my Social Security Retirement Calculator to learn more.
Our Retirement Savings Calculator gives you the option of including your Social Security benefits in its calculations to determine if you have enough funds to retire. Discover how early retirement can affect your Social Security benefits and the truth behind some common Social Security myths.
How Much Savings Do You Need to Retire With a Pension?
Having a pension helps provide you with an additional source of retirement income and eases some, but probably not all, of the burden of saving for retirement. If you are fortunate enough to have a retirement pension plan provided by your employer, you are in the minority these days. According to the U.S. Bureau of Labor Statistics, only 13% of private industry workers had access to both defined benefit (pension) and defined contribution (401(k)) retirement plans at their workplace in March 2018.
With a defined benefit plan, your employer makes contributions to the plan. You then receive this pension money in retirement either as a lump sum or as a monthly payment or as some combination of the two. If your employer offers a pension plan, it’s important to understand how it works and its benefits and how your pension fits into your overall retirement savings strategy. Our Retirement Savings Calculator incorporates your inflation-adjusted pension plan benefit, if you have one.
Do You Have Enough Money to Retire Now?
Our Retirement Savings Calculator can help you answer that question, which depends on a number of different factors, including your current age, how much you have already saved for retirement and how many years of retirement income you think you'll need in the future. If are considering an early retirement, you will want to think about how your pension and Social Security will be affected. If you have a pension with your employer, when are you eligible to start receiving it? Will it be a lump sum payment, a monthly pension amount or both? You may begin receiving Social Security benefits as early as age 62 or as late as age 70. Keep in mind, however, that if you retire early, your benefits are reduced by a certain percentage for each month before your full retirement age.
Our Financial Education articles can offer you additional financial tips about Social Security, taxes, health care and more to help you determine how much money you need to retire at age 50, age 55, age 60, age 62 and age 65.
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