Retirement Calculator

What is a Retirement Calculator? How does it work?
Online financial calculators are software programs or electronic spreadsheets that allow users to input data or estimates and obtain the result of a calculation. Some of the more common financial calculators that you can find online include mortgage calculators, college planning calculators and so on. 

Saving for retirement involves a long-term effort to accumulate enough savings to support you during your years in retirement. The goal of retirement planning is to determine how much you will need to save to be financially comfortable. 

Planning out how much money you need to save each month will go a long way in ensuring that you have a comfortable life after retirement. To do this, it means you must almost have to predict what will happen in the future. You will need to think what sort of return your money will get over the next 20 or 30 or 40 years? What will happen with inflation? Will Social Security still exist when you retire, and if so how much money will you get from it? While it is impossible to predict any of these things with total certainty, a certain amount of planning can be done by evaluating the past and making some educated guess. 

Retirement calculators are online tools that help you calculate how much you need to save for a period of time to get to your goal. A calculator can help focus your attention on saving more money for retirement. This calculation is based on certain inputs that will be required from you. There are many free online calculators that you can use to make a projection of how much you will need to save for your retirement. Before you settle on any one calculator, though, make sure you pick a good one.

The calculators work in different ways. The different inputs that could be asked include – your age, the age at which you want to retire, your pay, your total savings, and retirement assets. Not all calculators ask the same questions but all of them give an estimate of how much you will need to save to retire at a specific age.

Since the calculators use different inputs to arrive at the savings figure, it is advisable that you use two to three different calculators. This will help you arrive at a comfortable range of savings that can ensure you have comfortable retired life. Check the numbers you give carefully for any errors could skew the results. All retirement calculators will account for inflation rates. Inflation will increase the cost of everything over a period of time. 


One variable that is very hard to account for is Social Security. If you will retire in ten years or less you can safely plan on receiving social security payments and factor them in to your calculations. Call the social security office near you and they can tell you what your monthly benefit will be. 

While these calculators can greatly help you plan your finances in such a way that you can support yourself comfortably after retirement, you should consider consulting a certified financial planner to get the best results.