Retirement Planning: Use a Retirement Calculator
We all know that planning for retirement is important. After all, no one wants to find themselves at the age of retirement with no money saved and no plan for the future. There are many tools that can help you plan for retirement, including financial advisors, but one of the most important is a retirement calculator. This resource is so important because it provides you with a starting point for preparing for retirement. The calculator answers questions about much you should be saving, and how much you will need in retirement.
These calculators will show you how much you are currently making, how much you are spending, and how much you are saving. They will then calculate how much of your income you should be saving every month in order to stay on track with your retirement plan and be able to live the life you want after retirement. One of the best things about a retirement calculator is that you have the flexibility to play around with the numbers a little. You may assume that you are going to retire at the age of sixty-five. However, the retirement calculator allows you to change assumptions and look at the requirements and solutions if assumptions are different. For example, entering retirement age at 55 instead of 62 or 65 may provide some surprises; you will find what lifestyle changes may be necessary to be able to retire at 55.
Remember that the rate of inflation needs to be included in the retirement calculator to get an accurate result. To determine what this is, simply calculate the current rate of inflation (find it by searching ‘current inflation rate’ on the web) and add it to the inflation rate that is expected for your retirement years and the years you still have yet to work. Also remember to figure in all of your investments to make the calculation more accurate.
There are a number of retirement calculators that can be found online simply by typing “retirement calculator” into the field of a search engine. They are free and extremely easy to use as you are simply answering very basic questions. This non-personal approach is nice for some who are merely playing with the idea of retirement planning and are just starting to get a feel for what they need. They are a no-pressure solution to getting the basic information that you want without having to deal with a high-pressure financial advisor wanting your business.
However, because retirement calculators are so basic and don’t get past much more than the surface of the financial picture, it is very important that you speak with a professional advisor who specializes in retirement when you start to create a retirement plan that you will have to depend on.