Using Retirement Calculators

If you are saving for retirement you are doing better than most people but do you know how much you need to retire? Without knowing how much you need, you cannot effectively plan and save for retirement. We will give you some tips on using a retirement calculator to determine how much money you need to retire.

Factors To Consider

There are many factors that are taken into consideration when calculating your magic retirement savings number. To get an accurate estimate of your savings needs, you need to enter these factors correctly.

Your Age

You need to determine what age you would like to retire at. Take than number and subtract your present age. This is how much time you have to save.

Life Expectancy

How long do you expect to live. Be an optimist here, plan for a long but realistic time. If you estimate too long, you will be placing a large burden on yourself to save more money than necessary. If you save too little you might run out and be forced to go back to work late in life.

Inflation

The money you save now will not be worth as much in the future. Think about how much $1000 is worth now and how much it was worth 20 years ago. You need to calculate inflation to get a realistic number.

Social Security

How much money will you receive from social security. You should receive an estimate of your benefits every year from the Social Security Administration. You can request one here, Social Security Benefits Statement.

Return On Investments

How much money is your money making. Will you have it in a basic savings account earning 1 or 2 % interest or will you be investing it. Think about how much you realistically expect to make. Do not overestimate.