Do I Need to Use A Retirement Calculator?
Yes. There are a number of reasons why I recommend this:
- It organizes your thoughts toward the data that and other decisions that you really need to understand in order to develop your retirement plan.
- It was built by financial experts that know how to keep you from going down paths that don’t really support your goal – a good retirement plan that will tell you what you need to do today so you can retire well tomorrow.
- You won’t make mistakes. These software packages have been perfected over the years and the math is correct (unlike a home-grown tool that you might come up with on your own).
- You can easily change your inputs and try out different scenarios. This will help you narrow down your current financial position and your goals, and will give you more confidence that you are on the right path.
Shouldn’t I Just Use a Free Retirement Calculator on the Web?
NO – you won’t get close to a solution that takes into account your own situation. These generally are not detailed and give you just a very high level picture of your retirement situation. Often they have canned inputs and limited capabilities for reporting results, saving your work, and other considerations that are needed for anyone serious about retirement planning.
My recommendation is DON’T use the free website calculators out there, unless you don’t really care about getting the right answers (and if that were the case you wouldn’t be reading my website!).
The best retirement calculator for the money that I’ve found is the Retirement Calculator by Expert Software Systems.
This is a comprehensive product, with all of the tools that you need (ever!) and is more reasonably priced than many other (comprehensive) products out there. For $49.95, you get all of the following capabilities:
- Determines Assets remaining on a year-by-year basis, both pre- and post-retirement
- Calculates Social Security Benefits from age 62 to Age 70 (& beyond)
- Determines cumulative Social Security benefits, on year-by-year basis, based on benefit age
- Determines break-even point for taking Social Security at different ages
- Accounts for Social Security Spousal Benefit calculations
- Provides tools for calculating current monthly expenses and projected expenses
- Provides tool for coalescing all current assets
- Takes into account current income prior to retirement age
- Accounts for current 401K, 403B, & 457/IRA/SEP contributions prior to retirement
- Uses traditional defined pension plan amounts
- Accounts for post-retirement income and its tax consequences
- Handles appropriate taxation of post-retirement withdrawal of taxable retirement plans
- Handles Roth IRA’s
- Allows pensions to be optionally indexed by inflation
- Allows Tax Filing Status to be used in calculating Social Security tax liability
- Allows a variable annual inflation rate to be applied to monthly expenses & income sources
- Allow a variable annual investment return to be applied to Assets Remaining
- Allows a variable tax rate to be applied to Social Security & all income and taxable retirement sources
- Handles Single retirement planning or joint retirement planning
- Allows for selection of arbitrary retirement ages to determine effects on Assets Remaining
- Alerts you as to what year your Assets Remaining will run out
- Graphs Assets Remaining year-to-year
- Provides retirement summary and detail field breakdowns
- Provides contextual application help for all software fields
- Provides detailed Users and Installation manual
- Provides many assumption and reference details for further information
Here’s a video that describes the features of the Retirement Calculator:
For less than $50 you can’t go wrong with this product. And, it comes with a 60-day money back guarantee. Check it out on their website here.