Tree Logo. Retirement Planning Calculator

Retirement Planning Calculator.

Are you expecting to maintain a certain level of comfort when you retire? This calculator will help you figure out how much you’ll need to save in order to meet a specified monthly income after you retire.

First enter your age at the end of the current year, the age at which you plan to retire, your expected life expectancy, and your desired annual retirement income. Then in the fields provided below, include all the necessary information. Make sure to be as thorough as possible.

Click on “Compute & Create Schedule,” and you’ll receive a breakdown of what you need to provide for your desired retirement income. For a printer friendly report, click on the button below and a new browser window will open.

Enter Your Retirement Needs Inputs
Your age at the end of current year:
Age you plan to retire at:
Life expectancy:
Desired annual retirement income ($):
Every years of retirement, reduce our income need by (%):
Desired estate ($):
Expected average annual rate of inflation (%):
Retirement Funding Inputs
Current retirement savings:
Current monthly contributions:
Age to stop contributions:
Annual Interest Rate you expect to earn (APR %):
Combined Federal & State Tax Rate during retirement (%):
One-Time Benefits Inputs
($):
Age to Apply One-Time Benefit #1:
($):
Age to Apply One-Time Benefit #2:
($):
Age to Apply One-Time Benefit #3:
($):
Age to Apply One-Time Benefit #4:
Post-Retirement Income (Pension, SS, Wages, etc.) Inputs
($):
Annual COL Adjustment % Starting
Start & Stop Ages for Retirement Income #1 ($): to
($):
Annual COL Adjustment % Starting
Start & Stop Ages for Retirement Income #2 ($): to
($):
Annual COL Adjustment % Starting
Start & Stop Ages for Retirement Income #3 ($): to


Your Results Outputs
Savings Needed at Retirement Age:
Savings at Retirement Based on Present Entries:
Savings Surplus (negative number indicates a ShortFall):
Additional Monthly Contribution Needed to Fully Fund Plan:
Present Monthly Contributions:
Total Monthly Contribution Needed to Fully Fund Plan:


 

Financially Plan for Retirement: A How-To Guide

Risk Averse.

Retirement may seem like a far-off point in your distant future, but the time to start planning is today. Few invest the time, money, and discipline needed to reach solid financial goals by the time of retirement. Especially among the Millennial crowd, the average adult is overwhelmed by retirement prospects and struggles to outline a plan and stick to it. Over 68 percent of adults ages 18 to 35 say they are not investing enough to pay for an ideal retirement.

Setting Goals

Your goals will have to be clearly defined in terms of outcome and daily activity. Set S.M.A.R.T. (Specific, Measurable, Attainable, Realistic, and Timely) goals to ensure a foundation for success. Your financial goals should be:

  • Specific – Don't guess how much you need or how much you should be saving monthly to meet this goal. Be very specific in what results you want to achieve and how you plan to get there.
  • Measurable – Don't be afraid to fail – be afraid to fail without even knowing it. Set up outcomes and ways to assess your progress. The only way to recognize where you need to improve is if you can first determine whether you are falling short in some way.
  • Attainable – Choose financial goals that are within your means in terms of your position, abilities, and disposition. Don't select investment methods, like real estate or stock markets, that you are not able to follow through.
  • Realistic – Your financial goals should be realistic in terms of necessary retirement funds and investment success. Don't overestimate your investments, and don't under-estimate your retirement needs.
  • Timely – To complete your plans, set up end dates for each and every goal. Once you've established how much you want to save by a certain point in your life, choose checkpoints when you will assess your progress. These timelines are imperative for motivating you and keeping you on course.

Physically write out your goals and work with a financial planner who can overview them. By committing your plans to paper and sharing your goals with another person, you will be more likely to follow through. Narrowing the focus will help you feel less overwhelmed with the process and give you something solid to set your sights on each month.

Knowing Needs

Retirement is more expensive than you probably think. Experts estimate you will need 70 to 90 percent of your pre-retirement income to maintain the same standard of living you have now, but your situation could be completely different. It is important to calculate exactly how much you need for retirement and set up your goals accordingly.

The Centers for Disease Control and Prevention (CDC) and AARP reported that Americans are living longer than ever before. At the average retirement age of 65, most Americans will live 18 to 20 years longer because of healthier diets and fewer deaths from diseases. This, of course, means retirement planning should take careful consideration for this last quarter of your life.

Don't be optimistic in the cost of your retirement. Inflation costs over the course of 20 years can mean that your nest egg is zapped much more quickly than you originally anticipated. Your insurance coverage will also likely change; increased health problems, debts, and dependents will all impact the amount you need.

Utilizing Available Plans

Your employer likely has a retirement plan, like a 401(k). Contribute all you can to lower your taxes, get matched funds from your company, and benefit from automatic deductions. The compound interest and tax deferrals will accumulate quickly over time. Find out how much you have to contribute to get maximum employer participation and how long you have to keep money there to avoid penalties.

Know how these plans work and how you should handle funds if you change jobs. You won't want to withdraw your retirement savings early or you could lose principal, interest, and possibly tax benefits. You could also have to pay early withdraw penalties. If you change jobs, you may leave your funds in the current plan, move them to your new employer's plan, or roll them over to an IRA.

It is also important to know if you are eligible for a pension plan from your employer and how long you must be there to achieve the pension benefits. It is important to know how your pension could be affected before you change jobs. Your spouse may have a pension plan, and you will need to know if you will be entitled to those benefits.

Learning Principles

An important part of working towards a successful retirement will include expanding your understanding of investments. Sign up for a free investment newsletter to provide you with automatic investment information regularly. Take courses, read, or research investment principles and current markets to know where your money can make the best dividends for you.

Humpty Dumpty Cartoon.

You can't earn money with methods you haven't researched. Your financial education won't happen overnight, so it is important to treat it like you would any investment for your future. There are plenty of free opportunities online to learn about financial freedom, goal-setting, investing, and retirement planning. Look for reputable advisors who can provide knowledge from professional experience and not personal stake.

Getting Started

One of the most important keys to your retirement plan is that you get started today. Even if you are only able to pull a meager amount each paycheck, do it. And, pull the amount right after the paycheck comes through. Don't let the money sit in your account, or you will consider it money that can be spent. Even if you only read a few articles today and a few more tomorrow, do it. The longer you wait to start, the farther behind you will be.

Gypsy Reading a Man's Past.

Part of starting your retirement savings means reducing your spending. You will want to live well under your means in order to accumulate wealth for retirement and avoid debt. It is important to avoid lifestyle expenses now that provide the illusion of wealth but don't offer the financial freedom of true wealth.

You will also need to consider your estate planning now. There are important tax benefits in leaving behind your money intelligently. Everyone dies, so failing to plan for it only causes a burden for your loved ones. You will want to understand the best way to set up your estate for your loved ones and write a will to support it.

Paying Debts

Debts, especially high-interest debts, are a quick way to reduce your ability to save. Your immediate costs, in terms of fees and interest, will impact the amount you can pull from your check each month to store towards retirement. You will want to work towards paying off your debts to reduce the overall amounts you spend on interest in the future.

Start by paying off the bad debts (highest interest rates) as quickly as possible. Focus as much as you can on knocking out high-interest debts quickly and allow your lower-interest debts to be paid off at minimum payments. Avoid obtaining future bad debt by refusing to go into debt for consumer goods. High-interest debts with low value (like credit cards), do not give you a beneficial asset but will cost you in fees and interest. Instead, look for good debt (like real estate investments or educational investments) that maintains a low-interest rate and should benefit you financially in the long run.

Avoiding Temptation

Move your funds out of your savings account and into an account where they are hard to reach. Whether you place your funds in a government savings plan or an investment portfolio, make sure they are hard to get. You will find that when life's little speed bumps show up, savings will be the easiest thing to make them disappear.

Man Lacks the Temptation to Shower.

Without considerable discipline, you might pull from your retirement fund and this will not be made up easily. Instead, tuck your money away in a hard-to-reach place that has fees and rules about early withdrawal. Set up a rainy-day fund for the speed bumps in life and keep that separate from your nest egg. Your rainy-day fund should not be included in your retirement savings plan or considered part of your retirement goals.

Converting Funds

Don't just let your accumulated funds sit in a savings account, look for ways to convert your savings into income for retirement. Setting up a Registered Retirement Income Fund (RRIF) will allow you to grow your savings in your choice of investments without being taxed, though there is a minimum withdrawal each year that is fully taxable. Annuities will pay out according to the plan you choose, but remaining funds will not go to your estate when you die. Bonds will pay you interest. Stocks can pay dividends.

Retirement might seem overwhelming now, but just getting started can make a huge difference. Consistency is more important than yield when it comes to retirement. Your goals should require effort and discipline, but they should be well within your grasp. Plan today and you will be better prepared for tomorrow.