It is impossible to forecast the future. When talking retirement and strategic planning for your future, the magic question is “how much money do I need to retire?” But with that question comes a bucket full of other questions.
- How old will I be when I want to quit working full-time?
- When can I draw my retirement benefits?
(pension, 401(k), social security)
- What will my debt load be?
- What will my healthcare costs be?
- What are my plans during retirement?
- How long will I live? (Really? How am I supposed to guess that?)
Thinking about and beginning to plan for retirement can be scary and overwhelming. Fortunately, we have technology on our side and a plethora of tools available to, not necessarily come up with the magic number, but at least point us in the right direction and give us a number to work toward by taking all the above questions – and more – into consideration.
Here are several online tools to help you identify what you should strive for in your retirement savings adventure:
According to the US Department of Labor, fewer than half of Americans have calculated how much they need to save for retirement. In 2016, almost 30% of private industry workers with access to a defined contribution plan (such as a 401(k) plan) did not participate. The average American spends roughly 20 years in retirement. According to Nerdwallet, a common guideline is replacing 70% of your annual pre-retirement income.
If you were born in 1960 or later, your retirement age to receive social security benefits is 67 years.
Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement. You may be able to estimate your benefit by using the retirement estimator on the Social Security Administration’s Website.
The Social Security Administration also offers various calculators for retirement planning such as a Retirement Age Calculator and Retirement Estimator which estimates your monthly benefits based on your Social Security Earning Record.
The AARP, formerly know as the American Association for Retired Persons, is an organization known to help people choose how they live as they age. Their website offers a social security benefits calculator, retirement calculator and also a health care costs calculator.
Here are a few other free retirement calculators:
Retirement calculators can be a valuable tool for planning for the future when used properly. You will need to consider how your expenses may change in retirement – healthcare and travel may go up while the amount you put into savings may go down. Remember, when using these strategic planning calculators, they will only give you an estimate. There are too many unknown variables to make this an exact science. But it is good to begin thinking and planning for the future. These tools can be of help by presenting you with questions you may not have considered before.
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