Retirement Calculators

[Spud]

Do you have a favorite online Retirement Calculator?

When I do a Google search for "Retirement Calculator," I get many hits. Feeding info into various calculators gives me a wide range of outcomes, and I'm not sure which calculator to believe. What makes things more complicated is that I'm not sure what to put in for some of the variables, and tweaking them has some pretty major consequences on the results. Such as:

• What do you figure an average rate of return on your investments will be?
• Some of the calculators ask if you want to include Social Security. Do you do that?
• What % do you use for inflation?
• When you run a calculator, what do you consider your retirement age, and how long are you planning to live after retirement?

[sweeps]

8%
No
3.5%
62-90

[Like2Plan]

• What do you figure an average rate of return on your investments will be? 5%
• Some of the calculators ask if you want to include Social Security. Do you do that? No
• What % do you use for inflation? 3% (but, I might go to a higher figure because I don't believe it is really 3%)
• When you run a calculator, what do you consider your retirement age, and how long are you planning to live after retirement?

Age 55 for me. Age 65 for DH --up to 100 for both DH and I

[MonkeyMama]

I am conservative and pretty much assume the worst.

I agree with Sweeps except I put life expectancy to 100. Because it is common in my family to live past 100, and life expectancies are rising pretty rapidly. Frankly, I should probably "up" it.

oh, for retirement age? Around 65 I guess. I haven't pinned it down, as I may be able to retire earlier or may have to work much longer. That is the one variable I usually play with on the calculators to see different scenarios. It's the one thing I feel I have some measure of control over anyway.

[jIM_Ohio]

Originally Posted by Spud

Do you have a favorite online Retirement Calculator?

When I do a Google search for "Retirement Calculator," I get many hits. Feeding info into various calculators gives me a wide range of outcomes, and I'm not sure which calculator to believe. What makes things more complicated is that I'm not sure what to put in for some of the variables, and tweaking them has some pretty major consequences on the results. Such as:

• What do you figure an average rate of return on your investments will be?
• Some of the calculators ask if you want to include Social Security. Do you do that?
• What % do you use for inflation?
• When you run a calculator, what do you consider your retirement age, and how long are you planning to live after retirement?

There is one called firecalc on another board I visit which appears to be well thought out.

What do you figure an average rate of return on your investments will be?

8%

Some of the calculators ask if you want to include Social Security. Do you do that?

NO

What % do you use for inflation?

2%, 3% and 4%. Run it 3 times and see what happens.

When you run a calculator, what do you consider your retirement age, and how long are you planning to live after retirement?

50, 55,60,68

I plan to live to 120, so I can see just how robust my plan is, knowing I will have SS and an Annuity of some sort if that really is true.

If a calculator does not have withdraw rate, I don't really trust it- as that is foundation for my whole retirement plan.

[jc3900]

Even though I am 17 and have only a measly 4k in a vanguard account, I am very interested in modeling my investment growth.

1. What do you figure an average rate of return on your investments will be?

I use 8% for long term growth and 7% when I will be retired.

2. Some of the calculators ask if you want to include Social Security. Do you do that?

Heck No. At least for a 17 year old this is a definite NO. There is no way I will get anything out of it. It will crash by the time I am retiring.

3. What % do you use for inflation?

I use 4% for pre-retirement and 5% after.

4. When you run a calculator, what do you consider your retirement age, and how long are you planning to live after retirement?

I do consider my retirement age, but do not consider how long I will live. This is mainly because I plan on having enough money so that my investments after taking out money to live and accounting for growth and inflation is the exact same the next year. Thus, I can leave and give a hefty sum of money away to family and charity.

[disneysteve]

Originally Posted by Spud

What do you figure an average rate of return on your investments will be?

The better calculators also let you enter a return rate for pre-retirement years and a different rate for during retirement. This is important since you tend to make your portfolio more conservative once you are retired and depending on investment income.

[Caoineag]

Originally Posted by jIM_Ohio

There is one called firecalc on another board I visit which appears to be well thought out.

I like that one as well. It allows you to play with the variables quite a bit.

[jc3900]

I personally like this calculator:

Growth Calculator

[danwas44]

Fidelity has a really well thought out retirement calculator.

[Spud]

I have looked all over the place for a retirement calculator that will tell me what I want to know (are we saving enough, and if not, how much more do we need to save?). I can't find one that allows me to control enough of the variables on my own. They all either assume social security is going to be there when I retire, assume a rate of inflation that is invisible to me, won't let me add in our farm income during retirement, don't take into account Roth IRAs versus traditional IRAs versus 401(k)s, or any number of variables that make me think that the ol' GIGO rule applies.

I looked at Firecalc that JimOhio mentioned earlier in the thread, and it just confused me. Quicken has a great retirement calculator that lets me control all of the variables, and the bonus part about it is that it already knows all my financial info -- less entering for me. Except that for some reason it won't use my taxable account (almost half of our current retirement savings!) for retirement -- it counts it as "General Expenses."

So I don't know what to do. I guess I'm just venting. And wondering if I should just go ahead and try to figure out how to make my OWN retirement calculator in Excel. Dagnabbit.

[jIM_Ohio]

Originally Posted by Spud

I have looked all over the place for a retirement calculator that will tell me what I want to know (are we saving enough, and if not, how much more do we need to save?). I can't find one that allows me to control enough of the variables on my own. They all either assume social security is going to be there when I retire, assume a rate of inflation that is invisible to me, won't let me add in our farm income during retirement, don't take into account Roth IRAs versus traditional IRAs versus 401(k)s, or any number of variables that make me think that the ol' GIGO rule applies.

I looked at Firecalc that JimOhio mentioned earlier in the thread, and it just confused me. Quicken has a great retirement calculator that lets me control all of the variables, and the bonus part about it is that it already knows all my financial info -- less entering for me. Except that for some reason it won't use my taxable account (almost half of our current retirement savings!) for retirement -- it counts it as "General Expenses."

So I don't know what to do. I guess I'm just venting. And wondering if I should just go ahead and try to figure out how to make my OWN retirement calculator in Excel. Dagnabbit.

This is why a withdraw plan is different from an accumulation plan. I would design the calculators differently for each.

When accumulating the most important factor is time, taxes and rates of return. Other variables come into play, but those are by far the biggest contributors.

When withdrawing, the most important factor is to be "not negative" on return scale, followed by taxes, tax brackets and a few other variables which escape me right now.

It is not the same equation.

If I lose 8% of NAV, but fund shot off 2% in dividends, that 2% in dividends is more important than a loss of NAV when withdrawing. When accumulating the 8% loss is clearly a bigger issue.

Firecalc is more of a spend down calculator (spending), not accumulating (which appears to be what you are after). However version 3 is much harder to use than version 1 and 2- I believe I used 1 a few years ago and really liked it/ Apparently the programmer had too much time on their hands and messed it up.

I have a chart I use to track my progress. Check my blog or search my posts (search for one called "how many doubles" or something like that).

I can re create the chart to track contributions if needed.

[Spud]

Do you mean this blog post? If so, that is a good one.

I've been playing around with Retirement Forecaster this evening. I put in our account types & values to the best of my ability. I said we wanted $90k/year retirement income. Assuming 7% overall returns and 3.5% inflation, if we do the following for the next 22 years we should be fine until age 95:

$15,500 to 401(k)
$10,000 to IRA
$15,000 to taxable accounts

Of course, I would hope for better than 7%, and we would theoretically be able to do a reverse mortgage on our home if we needed to do so, but I hope we do not. But at least this gives me a starting point to 'check in' with our goals and figure out if we're saving enough.

I wish the calculator in Quicken worked the way it should. It would be so ideal. :/

[jIM_Ohio]

Originally Posted by Spud

Do you mean this blog post? If so, that is a good one.

I've been playing around with Retirement Forecaster this evening. I put in our account types & values to the best of my ability. I said we wanted $90k/year retirement income. Assuming 7% overall returns and 3.5% inflation, if we do the following for the next 22 years we should be fine until age 95:

$15,500 to 401(k)
$10,000 to IRA
$15,000 to taxable accounts

Of course, I would hope for better than 7%, and we would theoretically be able to do a reverse mortgage on our home if we needed to do so, but I hope we do not. But at least this gives me a starting point to 'check in' with our goals and figure out if we're saving enough.

I wish the calculator in Quicken worked the way it should. It would be so ideal. :/

That blog post also had another thread created around the same day. That thread had more comments on it.

I think a 7% return is low for long term planning. Simple tax planning could add 1-2% to this anyway.

Meaning I could plan for a 9% investment return without any tax considerations.
If I only get 8%, I can probably lower my taxes without lowering my income with proper planning. I might even be able to lower that to 7%.

Because you are putting 15k into taxable accounts as part of your plan, you could leverage taxes more than someone which only had money in 401ks and IRAs (and pensions).

[sweeps]

Your magic number for retirement

[Spud]

OK. I read your post about Creating A Retirement Plan, and also the post about Withdrawal Rates. All good information; thank you for pointing me toward them.

Unfortunately, forecaster does not give options to change your pre-retirement and post-retirement return on your investment. This is why I stuck 7% in. Of course, I would hope for better... but I would rather over-plan than under-plan.

I forgot one of our accounts in Forecaster -- my husband's profit sharing/pension. I'm pretty sure that as far as taxes go, this is considered pre-tax dollars, similar to a Traditional IRA. I assumed they would give $5k/year for planning purposes. I also forgot to add the employer contribution to the 401(k). I assumed $3,500/year. Making the above changes makes a more reasonable burden on us which looks like:

$15,500 to 401(k)
$10,000 to Roths (or non-deductible if we find out we cannot do Roths)
$6,000 to Taxable

I hope to save more than that, but this is what we need for retirement ... other moneys can go toward 529, new house, car fund, etc.