I found a very simple retirement calculator that's easy to use and fun to play with. But can you use it to base your serious retirement planning decisions on?
The answer is no!
But if you use this calculator as an educational tool so that you become better informed to take control of your own retirement planning, then it could be useful to start with such a simple calculator.
Moneychimp.com makes available this retirement calculator.
It opens in a pop-up window. Select Retirement Mode in the left column.
Under 'Current Capital' you enter your current balance in your retirement savings account.
Now enter what you plan to save annually towards your retirement savings account, the number of years you have to retirement, and the expected growth rate for your retirement savings account.
Next you estimate, based on your family history and your current health, how long you expect to draw against your retirement savings.
You need to provide an estimated growth rate after retirement. Normally you'll go more conservative in your choice of an investment portfolio for your retirement savings after retirement.
Click on 'Calculate' and it gives you your expected annual income during retirement.
I personally think this retirement calculator is too optimistic. I don't think it takes inflation into consideration. Please do not base your serious retirement planning decisions on it.
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