The Best Retirement Planning Calculator: Comprehensive Features to Help You Plan for Your Future
When planning for retirement, it is important to have as much information as possible to make the best decisions so that you can have the most confidence heading into retirement. That's why using a retirement calculator is such a valuable tool. A retirement calculator can help you estimate your life expectancy, calculate your net worth, add up all of your retirement savings, create a detailed budget, compare your retirement income to your retirement expenses, customize social security claiming strategies, set a unique inflation factor for each expense, stop and start expenses in the future, do a detailed cash flow analysis, model different asset allocation back testing scenarios, diversify across time segments using buckets, see your retirement savings at a glance on the retirement dashboard, compare yourself against retirement benchmarks to know if you are on track, provide a countdown to your retirement date, and calculate required minimum distributions and federal income taxes.
Why using a detailed calculator is better than a generic or easy retirement calculator?
When you are making decisions that will affect the rest of your life, you want to be as informed as possible and have all the tools at your disposal to make the best choices. A generic, easy retirement calculator might give you a quick estimate, but it is not going to give you the comprehensive view that a detailed calculator will provide. Some people only test how different asset allocation or withdrawal strategies might impact their retirement. This is a big mistake because retirement involves so much more than just investments. Taxes, social security, spending, life expectancy, and inflation all play a role in retirement and need to be considered when making decisions.
A detailed retirement calculator takes all these factors into account and more. It is the best way to get a comprehensive view of your retirement and make the best choices for your future. If you are serious about retirement planning, then you need to use a comprehensive retirement planning tool.
You can get all the features listed above in the Retirement Budget Calculator to help you understand where you stand and what needs to be done to reach your retirement goals.
The Retirement Budget Calculator is the best retirement planning calculator because it offers comprehensive and customizable features that will help you plan for your future. With this calculator, you can estimate your life expectancy, calculate your net worth, create a detailed budget, see your retirement income, customize social security claiming strategies, set a unique inflation factor for each income and expense, stop and start expenses, do a detailed cash flow analysis, model different asset allocation back testing scenarios, diversify across time segments using buckets, see your retirement at a glance on the retirement dashboard, and compare yourself against retirement benchmarks to know if you are on track for retirement.
How much do I need to retire?
The best way to determine how much you need to retire is to first make a comprehensive retirement spending plan. Once you know how much you spend you can easily calculate if you have saved enough to retire. The most common formula is to multiply your annual retirement expenses by 25 to see if you have saved enough. But using our retirement calculator will be more precise because spending does not tell the entire story. Our calculator will take into consideration how much income you will have coming in from social security benefits, pensions, and rental income. It will also help you have an idea of how much you will pay in taxes and how inflation will impact your spending over time and the rate of return at which your money will grow.
When Should I Retire?
This is a difficult question to answer without a retirement calculator because it depends on many factors including retirement age, annual income, annual retirement expenses, life expectancy, desired lifestyle in retirement, health status, and ability to work part-time in retirement. But as a general rule of thumb, you can retire when your savings can support your desired lifestyle for your remaining life expectancy.
How long does your money need to last?
This is another difficult question to answer. But as a general rule of thumb, you should plan for your retirement savings to last at least 20-30 years in retirement, assuming you retire at age 65. The social security administration has a life expectancy calculator that you can use as a starting point to understand average life expectancy. Your life expectancy will be a guide for helping you know how long your money needs to last. If you have a history of longevity in your family you might plan for 40 years of retirement, but if you have a lot of health concerns and a family history of not living a long life, you might plan for 20 years of retirement.
How to calculate your retirement savings and more importantly, your net worth?
Your net worth is your assets minus your liabilities. You can calculate your net worth so that you have a clear understanding of where you stand financially. Adding up all your retirement accounts will help you estimate if you have saved enough to support a lifetime of spending in retirement. When you add up your accounts, include your tax-deferred savings account such as an IRA or 401k, and also include any other liquid investment accounts like brokerage accounts and savings accounts. You can create your net worth statement for free. While net worth is important, remember that retirement is more of an exercise in generating retirement income. One thing that can make someone's net worth look good but not necessarily help their retirement is the value of their primary residence. Your home may be a large asset but unless you plan to sell it or take a reverse mortgage against it, it does not generate any retirement income.
What is a good monthly amount to retire on?
One important consideration is where you retire. Where you retire can make a big difference in how long your money will last and how much monthly income you will need in retirement. You will want to understand the cost of living with your retirement destination. Retiring in downtown Manhattan, New York compared to the suburbs of Montgomery, Alabama will have a big difference in monthly costs. But the best way to know how much you need to retire is by creating a detailed retirement budget. Will the state you retire to have a state income tax? How much are property taxes? SmartAsset has developed an online calculator to help you compare the costs of living in different areas around the country. Some people have decided to retire to other countries such as Mexico where their dollars stretch further. At the end of the day how much you need to retire on is dependent on your needs, wants, and wishes.
How to create a detailed retirement budget for free to estimate your annual retirement expenses?
The Retirement Budget Calculator is a tool that can help you create a detailed retirement budget for free. The calculator includes template expenses that many people have, and it also gives you the ability to create expenses unique to you. One of the things that makes the retirement budget calculator unique is that you can have expenses that occur at different frequencies. For example, you may only pay property taxes or insurance premiums once per year. The calculator also allows you to set a unique inflation factor for each expense. It also gives you the ability to start and stop expenses. This is a handy feature if you plan to travel for the first 10 years of retirement so you can set your retirement budget at a higher level, and then show the travel budget decreasing or ending after 10 years.
Try different social security claiming strategies and maximize your social security benefits.
The Retirement Budget Calculator also lets you model different social security claiming strategies so that you can see what is best for you. For example, if you are married, you can see how your social security benefits changes if your spouse claims social security early, at their full retirement age, or delays social security until age 70. Social security benefits are tax efficient, inflation adjusted, and have spousal and survivor benefits. When to start social security is an important consideration and for some people a good social security benefits claiming strategy can make the difference between having enough money for retirement verse running out of money early. Here is a YouTube video that teaches you how to determine the best social security claiming strategy for you.
Use a different inflation factor for retirement expense and retirement income.
As we mentioned, one of the features that makes the Retirement Budget Calculator unique is that you can have a different inflation factor for each expense. Many people do not realize that not all expenses go up at the same rate of inflation. A mortgage principal and interest payment does not generally increase with inflation but property taxes and insurance do. Additionally, food inflation rates have generally been less than the inflation rate on health insurance.
Start and stop income and expenses.
The Retirement Budget Calculator also allows you to start and stop incomes and expenses. This is a handy feature if you plan to travel for the first few years of retirement or downsize your home later in retirement. This is also a handy feature if you will have a mortgage payment when you first retire but you would like to see how your spending will change once the mortgage is paid off. Often when people get into their mid-80's or if they have a health event they won't spend as much on travel and they may move to a smaller home or even an assisted living facility. Being able to model how your spending will change overtime will give you a more realistic understanding of how long your money will last in retirement.
Detailed Cash-Flow analysis
The Retirement Budget Calculator will also do a detailed cash-flow analysis for you. This is important because it will show you not only how much money you need to retire but also how your spending will change over time. You can see how inflation will impact your plan, what your withdrawal rate is, and you can model different return scenarios to see how long your money will last.
Model historical asset allocation strategies
Our retirement calculator also allows you to model different asset allocation strategies. We will show you how a 70/30 or a 60/40 or a 50/50 stock to bond investment portfolio ratio would have performed using historical returns. We also give you the ability to see how bad timing of returns can impact you by assuming you have 3 bad years at the onset of retirement. As an alternative to using historical asset allocation returns, you could also assume a constant return such as a 3% or 4% return to make conservative assumptions about returns going forward.
Diversify using buckets
Buckets is a mental framework that helps people allocate investments in a way that helps you worry less during times of market volatility. The idea is that money you need for the short term is invested more conservatively and money that you won't need for the longest period can be invested more aggressively.
The retirement dashboard takes all the data from the various modules and gives you a one-page summary of your retirement financial plan. The dashboard includes a retirement count down timer, retirement benchmarks, monthly and annual cash-flow estimates, lifetime taxation, required minimum distributions, and social security taxation, to name a few.
The three benchmarks we use to see test your retirement readiness are as follows:
Secure income score- This benchmark compares your guaranteed income, such as social security, and compares it to your essential expenses over two people’s lifetime. The benchmark calls for 80% of essential expenses to be covered by guaranteed income.
The next benchmark is the safe withdrawal rate. 4% is considered a safe withdrawal rate and this benchmark looks at your actual withdrawal rate the first full year of retirement.
The last retirement benchmark compares your total debt to assets. Ideally by the time you retire your debt ratio compared to your assets will be 20% or less.
Countdown timer to retirement
The retirement countdown timer looks at your current age and your projected retirement age and it allows you track the years, months, and days before retirement. It counts down every day so that you can keep tabs on how much longer you will be working.
Estimate Federal Income Taxes
Retirement is all about cash-flow. But it is also about the income that you get to keep and spend after you pay your Federal Income Taxes. The calculator will produce an estimate of your Retirement Taxes. The tax estimation includes federal income taxes, and it also will calculate the amount of your social security that is taxed. By default, the tax estimates switch from married filing jointly when the first person dies so that you can see how being widowed will impact your tax return.
How much money should a 65-year-old have saved for retirement?
There are several factors that will impact this. If, for example you will have a pension in addition to social security it may not be necessary to have saved as much. In general, you should have saved 25 times your annual portfolio withdrawals the first year of retirement, assuming of course that you will choose a balanced investment strategy and plan for 30 years in retirement.
Being in a community with others is so valuable. The Retirement Budget Calculator has a community portal for our premium members. After you pay for a subscription to the calculator, we send you an invitation to join the private community. You can surround yourself with other money nerds who are on this retirement journey together- some of whom are ahead of you, some who are behind you, and some who are in lockstep with you. You are able to ask questions about social security, investing, health insurance, and travel. There is collective wisdom in the community. Sometimes successful people can feel isolated or alone. Not everyone has prepared for retirement, and it can be awkward to talk with family and friends about financial matters. A community of like-minded people with similar interests can make retirement feel less scary and more connected. One thing I know is that fear has a hard time taking root with other people around. But if you are all alone, isolated, with no one around fear can become crippling.
Who has the best retirement calculator?
Many retirement calculators only focus on investment returns and withdrawal strategies. As you can see from this article, retirement has so many more parts than simply investing, withdrawals, and Montecarlo analysis. While these are important items, using a calculator that is very simplistic may provide unrealistic expectations and could result in retirement failure, running out of money, or exhausting your retirement savings before you run out of life. Using a free, simple calculator may sound appealing and can give you a false sense of security. But I doubt your kids will be happy when you explain to them that you are moving in with them because you found some free retirement calculator. Valuable things are worth paying for. Paying for a retirement calculator means that you are investing in your future. Paying for a tool that helps you make the transition into retirement is only a cost if it does not help you.
Don't Delay Start Today
Get started now and create a free retirement budget in the Retirement Budget Calculator. https://retirementbudgetcalculator.com