Top 10 Retirement Calculators
Retirement calculators are an excellent way to figure out the size of your nest egg, the rate of return you’ll need to hit in order to retire comfortably, and even how much money you’ll receive from Social Security (or won’t) when you do retire. These calculators can be accessed online at any time, so it doesn’t matter if you feel like you don’t have enough information yet or if you haven’t started planning for retirement—you can start planning immediately! Here are ten of the best retirement calculators on the Internet.
But before you read the article, here is a link to our free retirement video that will show you how to avoid running out of money in retirement and potentially increase your retirement income:
My Favorite Retirement Calculators
- Schwab: Their calculator will walk you through several screen to ultimately calculate how much you need to save for retirement or inform you on how much to decrease your expenses by in retirement. https://www.schwab.com/retirement-planning-tools/retirement-calculator
- Nerd Wallet: This calculator is quick and easy. You start by entering your age, income, and current amount in savings. Then you enter how much you are currently saving monthly. Nerd Wallet also has more detailed options like your retirement budget, when you want to retire, and life expectancy. After you input all the data requested, it will give you an estimate as to how much you need to retire at your desired age plus a "Retirement Savings Score," which is quite easy to understand with only 4 categories: "Needs attention", "On Your Way", "Getting Close", and "On Track." https://www.nerdwallet.com/investing/retirement-calculator
- Smart Asset: Smart Asset has a unique feature in the way their calculator operates. They don’t start you out with an open calculator. Instead, they start by asking you questions like "how old are you?", "how much do you have in your 401(k)?", etc. Then, after you answer all of their initial questions, they will recommend how much you should be saving per month to meet a certain dollar amount of annual expenses, or the calculator may read "Congratulations!" if you have enough in their opinion. Also, once you have finished answering all the questions, you may then adjust numbers in their "calculator." Finally, unlike the other calculators, Smart Asset will recommend up to 3 financial planners that may be able to help you with planning your retirement. https://smartasset.com/retirement/retirement-calculator
- Merrill: Or "Mother Merrill" as this company was called when I entered the industry in 1998. After the 2008 financial crisis, Merrill Lynch was purchased by Bank of America and the nickname was no longer applicable. Anyway, back to calculators. Merrill's calculator is another one of those quick and dirty ones. You input just a few items, then it spits out the important conclusion of whether or not you are on track for retirement with suggestions for monthly savings if you are not on track to retire at your desired age. This calculator also has a toggle where you can turn off/on Social Security assumptions. https://www.merrilledge.com/retirement/personal-retirement-calculator
- Vanguard: Vanguard's calculator is in the form of what they call a "Retirement Story." It gives you a basic look at your retirement with an easy input by way of the story. Their story has you fill in the blank with your age, the age you want to retire, how much you make and save a year, how much you will need during retirement, and finally the rate of return on your investments. After you finish the story, Vanguard gives you "Your Results," which has how much money they expect you to have saved up at retirement in addition to your expected monthly expenses and income. The income is derived from your investments and the number that you enter for Social Security. Vanguard has a great link to the Social Security website's calculator. https://investor.vanguard.com/calculator-tools/retirement-income-calculator
- AARP: This calculator has a 3-step process. The website and calculator itself are not that impressive looking as of January of 2022, but it works. Before starting the steps, there is an introduction with no questions but more of a prep speech. Not a motivational one though. In step 1, you are asked questions like marital status, age, salary, savings, Social Security, and more. One question to note is that you are asked your gender and the gender of your "partner." I found this question entertaining and unnecessary but also somewhat flexible. You have the options with this calculator to be gay or straight with 2 choices "Male or Female" for your partner's gender. This is rather limiting, as it does not include 5 other popular gender choices like: Intersex, Trans, Non-Conforming, Personal, and Eunuch. Additionally, some people have not yet claimed a gender. If you are not male or female, I suggest you just flip a coin and check one of the boxes so you can at least get an answer. I hope you don't feel constrained by these limited gender choices in step 1. AARP is for seniors and one might expect they would try to do something so closed minded as to limit genders to only 2. (that was tongue in cheek, as most readers probably understood.) Step 2 gives you their summary of how you are doing with the amount of savings you will need and what they project you will actually have. Finally, in step 3, which is called "options," you will be given a final verdict with a graph to show you how you are looking during retirement. https://www.aarp.org/work/retirement-planning/retirement_calculator
- Kiplinger: This calculator is divided into 5 sections: 1) How much income will you need in retirement? 2) How much retirement income will you receive from Social Security and pensions? 3) How much retirement savings have you already accumulated? 4) How much will you draw from home equity? 5) How big of a nest egg do you need? After entering all the data, you are taken to a screen and given the verdict by way of a "Nest Egg Goal"; the future amount they estimate you will have and the amount you should be saving monthly. I did not enjoy this calculator as much as some of the others. This one did not take into account taxes either. https://www.kiplinger.com/kiplinger-tools/retirement/t047-s001-retirement-savings-calculator-how-much-money-do-i/index.php
- MGP: The calculator/financial planning software, so to speak, that we use for retirement planning for our clients is called Money Guide Pro. We run scenarios that allow us to adjust for:Inflation, taxes, projected returns on savings before and after retirement, retirement age (for spouse too if married), end of plan (or death), probable budget or expenses during retirement, future desired purchases like cars, vacations, etc., retirement income like pensions, Social Security, annuities, rental homes, and more, goal strategies (the Goal Strategies section of our software allows you to see the effect of repositioning money from one or more of your current assets to complete/purchase a(n) Immediate Annuity, 72(t) Distribution, Lifetime Income Annuity, Roth Conversion, Qualified Distribution, Qualified Charitable Distribution, or Net Unrealized Appreciation (NUA)), extra savings by tax category, and more. You want a calculator that will take into account taxes, Social Security, and inflation.
Another Retirement Calculator
Social Security Administration: Called a quick calculator. This one is different from the others in 2 ways: #1) it focuses only on your Social Security benefits and #2) this is a government website. This is a very important calculator for retirement and one that needs to be on this list for obvious reasons. With this one, you start by entering your date of birth, then your covered earnings, and finally your desired future retirement date. https://www.ssa.gov/OACT/quickcalc
Retirement Calculators for all Ages
Bankrate: Because Bankrate's calculator does not take into account Social Security, it may be more suitable for people ages 25-45, or a someone who is not so close to retirement. https://www.bankrate.com/retirement/calculators/retirement-plan-calculator
Do You Know How Much You Should be Saving?
Most of us don’t. Taking a quick look at your salary and multiplying it by 20 or 30 years is not an accurate way to figure out how much you should be saving for retirement, and using the 4% rule is not a wise way to come up with how much you will need for retirement.
Use a Retirement Calculator, Not Your Gut Feeling
Gut feeling is defined as an instinctive feeling, as opposed to an opinion based on facts. Many Americans try to guess how much they will need in retirement, but why use your gut when you can have a computer crunch your numbers? There are hundreds of retirement calculators available online, and each one calculates a different amount based on different assumptions.
Maximize Your 401k/ IRA/ TSP Contributions
If you’re not taking advantage of your employer-sponsored retirement account, you’re doing yourself a disservice. For most Americans, there is some tax incentive for contributing to 401(k)s and IRAs. Even if your employer does not offer a matching contribution, taking advantage of these accounts can have a huge impact on your retirement savings. And now many employers offer a Roth retirement savings account option.
Know What Percentage of Your Investment Return gets Eaten up by Fees
It’s easy to be overwhelmed by all of these retirement accounts—401(k), IRA, Roth IRA, etc.—and overlook one of their biggest disadvantages: fees. It’s important to know exactly how much you’re paying in fees because they could seriously eat into your earnings. Nerd Wallet provides a handy fee calculator (https://www.nerdwallet.com/article/investing/mutual-fund-calculator) that lets you input your expense ratios (of mutual funds and ETFs) and see how much money you stand to lose in fees.
Vanguard did an insightful study on investment fees and the impact they have on your savings long term that you may read here: https://investor.vanguard.com/investing/how-to-invest/impact-of-costs.
Use a Tax Calculator When it’s Time to Withdraw Funds in Retirement
After decades of saving, hopefully you’ll be looking forward to spending some of your money in retirement. Tax-deferred accounts like traditional IRAs and 401(k)s are funded with pre-tax income. When you withdraw funds, you must pay taxes on them—and pay a penalty if you’re under age 59 1/2. That might make it worthwhile to take your money in small increments rather than withdrawing it all at once. But when should you start? How much money do you have in Roths or taxable accounts?
Retirement Ready Success Call
If you have questions about how to use a retirement calculator or which one may be right for you, then use this link: https://calendly.com/thomascloud/retirement-ready-success-call to set up a no-cost, no-obligation retirement-ready success call, where we will chat for 20 minutes or less about where you are now and where you want to be in the future. I will also share some tips I use with my clients who are facing similar challenges as yourself.