Retirement Planning Calculator
Use this retirement planning tool to work out how much you might need to save in order to meet your retirement goals.
Disclaimer: Whilst every effort has been made in building this tool, we are not to be held liable for any damages or monetary losses arising out of or in connection with the use of it. Full disclaimer. This tool is here purely as a service to you, please use it at your own risk.
Retirement Calculator - Reality Planning vs Traditional Planning
Predicting how much money you might need for retirement can be a tricky task, especially when attempting to extrapolate from current earnings and spending patterns.
Analysis of retirement spending data demonstrates that the average household spends less with each passing year - contradicting those calculators that assume that spending levels will simply increase year-on-year with inflation.
The Retirement Planning Calculator takes this detail into consideration when preparing your retirement calculation; providing you with a reality planning figure. The calculator has been developed to forecast (based upon the information you provide about your current situation) an assessment of your retirement spending, together with the savings goals you will need to put in place to meet the requirements. To help you compare, the calculator also provides figures for the more traditional retirement planning method.
As mentioned in the disclaimer, the calculations provided by the retirement planner are only a guide and I always recommend speaking to a qualified financial advisor for professional guidance.
Note: the website Vertex42 has a very useful retirement savings withdrawal spreadsheet for Microsoft Excel, should you wish to use it.
How Much Do I Need For Retirement?
Proper retirement planning is essential if you want to sustain a comfortable lifestyle beyond retirement age. When you're just starting out in your chosen career, it's all too easy to put off thinking about pensions, however the golden rule in retirement planning is: act now.
The oft-quoted calculation for the amount to save for your retirement is to halve your current age (age calculator here if you need it) and then save that percentage of your gross income, e.g. a 24-year-old should save 12% of their gross income into a pension. This is far better than no pension at all, however, this 'one size fits all' approach fails to take into account many additional factors: what lifestyle you want to have in your retirement years, how active you'll be, where you want to live and if you'll still have a mortgage or dependents.
For information relating to the 401(k) pension scheme, take a look at our guide to the 401(k).
If you have any problems using this retirement planning calculator tool then please contact me.