This retirement calculator appears simple, but it has more capability for complex and advanced retirement planning than any calculator ...show more instructions
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Income
Assets
| Year i | Age i | Year Begin Balance i | Contributions i | Investment Return i | Inflated Need i | Income i | Adjusted Need i | Pre-tax Need i | Year End Balance i |
| 2021 | 45 | 400,000 | 5,500 | 27,500 | 80,000 | 0 | 433,000 | ||
| 2022 | 46 | 433,000 | 6,000 | 32,475 | 82,400 | 0 | 471,475 | ||
| 2023 | 47 | 471,475 | 6,000 | 35,361 | 84,872 | 0 | 512,836 | ||
| 2024 | 48 | 512,836 | 6,000 | 38,463 | 87,418 | 0 | 557,298 | ||
| 2025 | 49 | 557,298 | 6,000 | 41,797 | 90,041 | 0 | 605,096 | ||
| 2026 | 50 | 605,096 | 6,000 | 45,382 | 92,742 | 0 | 656,478 | ||
| 2027 | 51 | 656,478 | 6,000 | 49,236 | 95,524 | 0 | 711,714 | ||
| 2028 | 52 | 711,714 | 6,000 | 53,379 | 98,390 | 0 | 771,092 | ||
| 2029 | 53 | 771,092 | 6,000 | 57,832 | 101,342 | 0 | 834,924 | ||
| 2030 | 54 | 834,924 | 6,000 | 62,619 | 104,382 | 0 | 903,543 | ||
| 2031 | 55 | 903,543 | 0 | 67,766 | 107,513 | 0 | 971,309 | ||
| 2032 | 56 | 971,309 | 0 | 72,848 | 110,739 | 0 | 1,044,157 | ||
| 2033 | 57 | 1,044,157 | 0 | 78,312 | 114,061 | 0 | 1,122,469 | ||
| 2034 | 58 | 1,122,469 | 0 | 84,185 | 117,483 | 0 | 1,206,654 | ||
| 2035 | 59 | 1,206,654 | 0 | 90,499 | 121,007 | 0 | 1,297,153 | ||
| 2036 | 60 | 1,297,153 | 0 | 97,287 | 124,637 | 0 | 1,394,440 | ||
| 2037 | 61 | 1,394,440 | 0 | 104,583 | 128,377 | 0 | 1,499,023 | ||
| 2038 | 62 | 1,499,023 | 0 | 112,427 | 132,228 | 0 | 1,611,450 | ||
| 2039 | 63 | 1,611,450 | 0 | 120,859 | 136,195 | 0 | 1,732,308 | ||
| 2040 | 64 | 1,732,308 | 0 | 129,923 | 140,280 | 0 | 1,862,232 | ||
| 2041 | 65 | 1,862,232 | 0 | 139,667 | 144,489 | 0 | 2,001,899 | ||
| 2042 | 66 | 2,001,899 | 0 | 150,142 | 148,824 | 0 | 2,152,041 | ||
| 2043 | 67 | 2,152,041 | 0 | 107,602 | 153,288 | 0 | 153,288 | 186,937 | 2,072,706 |
| 2044 | 68 | 2,072,706 | 0 | 103,635 | 157,887 | 0 | 157,887 | 192,545 | 1,983,797 |
| 2045 | 69 | 1,983,797 | 0 | 99,190 | 162,624 | 0 | 162,624 | 198,321 | 1,884,665 |
| 2046 | 70 | 1,884,665 | 0 | 94,233 | 167,502 | 0 | 167,502 | 204,271 | 1,774,627 |
| 2047 | 71 | 1,774,627 | 0 | 88,731 | 172,527 | 0 | 172,527 | 210,399 | 1,652,960 |
| 2048 | 72 | 1,652,960 | 0 | 82,648 | 177,703 | 0 | 177,703 | 216,711 | 1,518,897 |
| 2049 | 73 | 1,518,897 | 0 | 75,945 | 183,034 | 0 | 183,034 | 223,212 | 1,371,629 |
| 2050 | 74 | 1,371,629 | 0 | 68,581 | 188,525 | 0 | 188,525 | 229,909 | 1,210,302 |
| 2051 | 75 | 1,210,302 | 0 | 60,515 | 194,181 | 0 | 194,181 | 236,806 | 1,034,011 |
| 2052 | 76 | 1,034,011 | 0 | 51,701 | 200,006 | 0 | 200,006 | 243,910 | 841,801 |
| 2053 | 77 | 841,801 | 0 | 42,090 | 154,505 | 0 | 154,505 | 188,421 | 695,470 |
| 2054 | 78 | 695,470 | 0 | 34,774 | 159,140 | 0 | 159,140 | 194,073 | 536,170 |
| 2055 | 79 | 536,170 | 0 | 26,809 | 163,914 | 0 | 163,914 | 199,896 | 363,083 |
| 2056 | 80 | 363,083 | 0 | 18,154 | 168,832 | 0 | 168,832 | 205,892 | 175,345 |
| 2057 | 81 | 175,345 | 0 | 0 | 173,897 | 0 | 173,897 | 212,069 | 0 |
| 2058 | 82 | 0 | 0 | 0 | 179,114 | 0 | 179,114 | 218,431 | 0 |
| 2059 | 83 | 0 | 0 | 0 | 184,487 | 0 | 184,487 | 224,984 | 0 |
| 2060 | 84 | 0 | 0 | 0 | 190,022 | 0 | 190,022 | 231,734 | 0 |
| 2061 | 85 | 0 | 0 | 0 | 195,722 | 0 | 195,722 | 238,686 | 0 |
| 2062 | 86 | 0 | 0 | 0 | 201,594 | 0 | 201,594 | 245,846 | 0 |
| 2063 | 87 | 0 | 0 | 0 | 155,731 | 0 | 155,731 | 189,916 | 0 |
| 2064 | 88 | 0 | 0 | 0 | 160,403 | 0 | 160,403 | 195,614 | 0 |
| 2065 | 89 | 0 | 0 | 0 | 165,215 | 0 | 165,215 | 201,482 | 0 |
| 2066 | 90 | 0 | 0 | 0 | 170,172 | 0 | 170,172 | 207,527 | 0 |
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Retirement Calculator Tips For Best Results
A retirement calculator is a valuable tool when used properly, but can dangerously mislead you when used improperly.
The best retirement calculators allow you to model your financial plan by varying input assumptions and then projecting those assumptions into the future. You can include projected income sources, growth of retirement savings, as well as model the sale of substantial assets such as a business or real estate to see how it affects savings growth and income over time.
In other words, retirement calculators make the math of long-term financial modelling easy. That is their redeeming feature. You can put real numbers behind your future plans to decide both how much money you need to retire and if you are saving enough to reach the goal.
Without a retirement calculator the math would be too complicated for all but the most dedicated spreadsheet junkies.
Retirement Calculator Dangers Revealed
The incorrect way to use a retirement calculator is to believe in the “magic number myth”.
You've probably seen the advertisements from brokerage firms asking, “How much is your number?”, with people walking around with red numbers stamped on their forehead. This is nonsense. It doesn't work that way. There is no magic number. All retirement calculations are just mathematical projections of input assumptions to form hypothetical estimates.
In fact, your estimate for how much money you need to retire is only as accurate as the assumptions used to make that estimate. If your input assumption is wrong then your retirement estimate is wrong as well because it's merely a mathematical projection of the chosen assumptions – nothing more.
Don't be deluded by the apparent mathematical precision of a retirement calculator into believing the estimate provided is similarly accurate. It isn't.
Assumptions Required To Estimate How Much Money You Need To Retire
All retirement calculators require the same basic inputs to work their magic – your retirement age, life expectancy, inflation, investment return, portfolio size, and expected retirement expenses. These are the required assumptions, and every calculator must have these inputs. No exceptions allowed because the math requires these inputs.
The fundamental problem is many of these required assumptions are tantamount to forecasting the future, which is impossible. Unless you have a crystal ball or can read goat entrails, then the future is unknowable. It cannot be predicted with sufficient reliability to bet your financial future on.
Related: How Your Financial Advisor is Taking 75% of Your Retirement Income (or More!) Video, PDF download, or Audio.
The industry standard approach for dealing with these unknowable assumptions is to apply historical average estimates. The implication is the past is indicative of the future. For example, the historical average inflation rate in the United States has approximated 3% so most experts recommend using 3% for your future inflation projection.
The problem with this approach is obvious. The future is not the past, and the only inflation rate that matters to your retirement forecast is in the unknowable future – not the past. Forecasting this number accurately is impossible. Ph.D. experts who've made a career studying inflation can't even project it accurately for just one year into the future. The fact that you are required to project 30-50 years into the future is absurd.
Similarly, consider the life expectancy assumption. Nobody can know when they are going to die. The whole idea is ridiculous.
The industry standard solution is to use life expectancy tables and project the average (possibly adjusting for personal health issues or family history), but this makes no sense. Nobody's date with destiny can be predicted statistically because no single life expectancy has any statistical validity. You are no more likely to die at age 83 than today, or age 90. Death for any individual is a one-time event that cannot be predicted statistically. It is a misuse of statistics because life expectancy is only valid for large groups of people like what the IRS or an insurance company works with. It is not valid for any one individual.
Best Retirement Calculator Practices – Iteration vs. Set-It-&-Forget-It
There is a reliable solution to planning for retirement. It just doesn't follow the conventional wisdom.
If you want to apply the conventional model for retirement planning you must create a range of reasonable estimates for each assumption and then build a confidence interval for your retirement number.
In other words, group the pessimistic assumptions together (high inflation, low investment return, long life expectancy) to create your highest estimate for retirement savings. Then group your most optimistic assumptions together (low inflation, high investment return, early death) to create a low-ball estimate for how much money you need to retire. Reality will probably be somewhere in between.
Once this is complete don't just set it and forget it. Instead, repeat the process of estimating your retirement needs by improving your estimates based on what has actually occurred since your last calculation. Over time you will correct and adjust your way to an accurate retirement number like a rocket heading to its target.
Additionally, if you would like to learn two other models (besides the conventional model using confidence intervals) for estimating your retirement savings needs then make sure to see my bestselling book on Amazon explaining how all of this works. It fully covers all the issues discussed here while providing actionable solutions and ranges for assumption estimates, and it explains two alternative models for retirement planning that are simpler, more accurate, and more reliable than the conventional wisdom.
It is the complete solution for how to use retirement calculators correctly and estimate how much money you need to retire.
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Ultimate Retirement Calculator Terms And Definitions:
- Retirement age: Age at which a person is required to step down. Usually referred to as mandatory retirement age. Can also be used to describe a standard age where most people retire such as age 65 in the United States.
- Retirement benefits: A monthly payment and other benefits such as health care for a person who has reached retirement age.
- Pension: An arrangement to pay a person a regular income when they are no longer earning by actually working
- Government pension: An arrangement of support given by some government to its senior citizens.
- Life expectancy: The average period that a person is expected to live.
- Desired annual retirement income: The amount that a retired person wishes to have as household income
- Desired estate: The amount of estate a retired person wishes to leave to his loved ones
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