What Is the Best Retirement Calculator?

Category: Financial and taxes in retirement

June 11, 2013 — What is the best retirement calculator to help you determine how much money you need for retirement? The short answer is … just about any good one, because more information leads to better retirement outcomes. The Employee Benefits Retirement Institute (EBRI) recently found that people in the lowest-income quartile who use a retirement calculator can improve the probability that they will not run short of money in retirement by 14.6 to 18.2 percentage points. This article will review a range of some of the better calculators as well as explain why they are useful.

What are online retirement calculators – and how can I find a good one?
Most retirement calculators have to do with retirement finances – they take inputs like how much money you have saved, what type of investment vehicles you prefer, and what your current income and future lifestyle expenditures look like. Once you have put in these and other factors the calculator spits out information like how much you need to save, and what the probabilities are of running out of money before your the end of your life expectancy.

If you search on Google or other search engine for retirement calculator you will see an astonishing array of calculators. Just about every life insurance company, brokerage firm, and mutual fund company offers a retirement calculator, and most are pretty good. Non-profits and federal organizations like Social Security also have various types of calculators.

Here are some of our favorites:
Each calculator takes a little different spin on the issue – look at several to see what makes the most sense for you. We are not endorsing any one calculator, and know that there are many more that could have been chosen. But this will present you with a wider choice of calculator options so you can have a better chance of retirement success. After all, if you don’t know how much money you need in retirement you can’t save the right amount!

Social Security Estimator. This calculator is very good, although it is focused on just one facet of the puzzle – Social Security income. Most baby boomers’ primary source of retirement income will be Social Security. We recommend that everyone start with this calculator, because knowing how much money you can expect from this source is an essential first step. A key component of the estimator is at what age you plan on starting to take this benefit – the longer you wait (up to age 70), the more you will get.

Firecalc. This calculator is popular with many independent financial advisors because it shows you the range of what can happen with your portfolio. You start by entering how much you need, how much you have, and how many years you want the plan to last. FIRECalc will help you get a sense of just how safe or risky your retirement plan is, based on how it would have withstood every market condition we have ever faced. The end result shows a Rorschalk-like diagram of results, which will get a good idea of whether or not your money will last long enough – under just about any circumstance from stock market boom to a 1929 style depression. FireCalc is free, although donations are welcome.

Ken Steiner – HowMuchCanIAffordtoSpendinRetirement.webs.com. Ken, who has written an article on this subject for Topretirements (see further reading below), is another non-profit resource to help you with your retirement calculations. A retired pension actuary, he has developed an Excel spreadsheet and process to help you determine how much of your available retirement resources you can spend each year, which he calls your “annual spendable amount.” This actuarial approach involves performing an annual valuation of assets and liabilities (the present value of future withdrawals) using deterministic assumptions about future experience. His website also has many helpful articles explaining how to make sure you have enough money for a long-lasting retirement.

CNN-Money. This website has a simple calculator that focuses on how much you will need for retirement, depending on your age, when you plan on retiring, and a few other factors. Then it tells you what the chances are of you getting that amount, along with suggestions on changes you might make.


Bloomberg’s Retirement Calculator. This one is also quite simple. Input how much you have saved, when you want to retire, your expected rate of return – and presto – you get a number for what you have to save to get there. It includes Social Security benefits in its calculations.

AARP Calculator. The AARP Retirement Calculator takes you through various screens asking you questions about your marital status, current income, savings, social security benefits, and expected retirement lifestyle. The result is a very clear chart that shows approximately how much income you will have – and how much you need to support your expected retirement lifestyle. If there’s a gap between the two, it shows you options. We like this one because it makes it very clear if you have a problem or not.

Kiplinger Savings Calculator. This Savings Calculator will help you estimate the future value of your retirement savings and determine how much more you need to save each month to reach your retirement goal. Actual results will depend on how much you contribute to your retirement accounts, the rate-of-return on your investments, and how long you live. It doesn’t take taxes into account.

Charles Schwab Calculator. We like this calculator for its straightforward approach. It also offers an opportunity to input more about your investment strategy – how risk tolerant are you? After you input the usual info such as your current and expected retirement age, amount saved, how much you want to spend in retirement, etc. you end up with a graph that shows your expected savings plus any gap that exists from what you need. Like the AARP calculator – the graph makes it very clear.

Merrill Lynch Personal Retirement Number Tool. This is another interesting and easy to use tool. It asks you a few simple questions, and then tries to give you a “number” that you need to hit so you can have 85% of your working days retirement income. It is not clear if it counts Social Security or other pension type income in its calculation.

Retirement Ranger. Lastly, we have to mention our very own Retirement Ranger, because it is a calculator too, although of a different kind. Use our simple 9 question calculator and it will give you a wide variety of possible retirement locations that make sense for you. It is not particularly financial (although you can select low or high cost areas); it is more a lifestyle calculator.

Are these calculators any good?
Yes, they are usually quite useful. You absolutely have to know how much money you are going to need in retirement, and if your current savings, savings plans, social security, and other income will match that number. Will you have enough? And if not, what is the shortfall and how can you make it up? Try several calculators and see which one clicks for you.

Comments? Do you have a favorite retirement calculator? Please share your experiences and recommendations in the Comments section below.

For further reading:
How Much Can You Spend in Retirement
My Wife is Worried: Will We Have Enough Money for Retirement?

Posted by Admin on June 11th, 2013

10 Comments »

  1. After looking at a few of these calculators I think that just about any one is better than nothing. I thought i had a pretty good picture of our retirement finances, but after running the numbers (painlessly and quickly) I see that i was under some misconceptions. Better to know now than later!

    by Mark — June 25, 2013

  2. This comment was emailed to us from Steve:
    Concerning yuor article on retirement calculators, I’m surprised you didn’t mention Fidelity’s Retiremenet Income Planner.It allows you to enter all types income and investments, risk tolerance. Plus expenses for every year into the future. Also, you are able to do all kinds of what if’s based on different market projections, inflation, etc. If you have investments with Fidelity they will pull all of that in so you don’t have to reenter. The best part is it’s free.

    by Admin — June 27, 2013

  3. I have only tried the AARP calculator so I can only comment on that one but it seemed to give me erroneous readings. I tried several scenarios and it always showed me I had a gap between what I have and what I’ll need–and of course, suggestions on investments to fix the situation. I entered bogus amounts near half a million for income and investing tens of thousands a month and it still indicated I would be short. I think it may be a tool geared toward selling investments. It also has nowhere to account for my VA disability income or my military retirement or any pensions other than social security.

    by Pat — June 28, 2013

  4. I have not found a calculator that works with a state pension with cost of living increases for one spouse, SS for the other spouse, and an annual 401k withdrawal…any suggestions? Also does anyone know of a state that would not tax any of these income sources?

    by Sandy — July 9, 2013

  5. I would just be happy to find a state that doesn’t tax 401 K accounts (except those with no income tax, of course). It is kind of mean spirited since most is capital gains, but it get taxed as income…then to add insult to injury, it is not earned income so I cannot put into a Roth. NOT EARNED…I have a self directed IRA and worked very hard buying and selling stocks to get a good growth. The only pension that I have will be $100/month from my first “real” job that I worked 10 years.

    by Elaine — July 10, 2013

  6. From what I understand, PA does not tax any retirement account/pension/social security. Not a tax pro, though.

    by Julie — July 11, 2013

  7. Elaine, Julie is correct, PA is one of the few states with an income tax that does NOT tax 401k Retirement withdrawals. Offsetting that somewhat is higher property taxes, particularly in more urban areas. Relative (to urban) bargains in home prices & real estate taxes can be found in smaller towns/cities in PA

    by Bill S. — July 12, 2013

  8. Julie and Bill,
    Thanks for the info on 401k and traditional IRAs. It is useful. I like living close to (but not in the downtown of) larger cities. So I many have a higher property tax. I am looking at Raleigh (Triangle area) of NC as well as Asheville NC and Greenville SC. I know there will higher income taxes, but lower cost of living. I will explore Seattle, but think the costs will not work for me in Seattle area. I want to enjoy the area.

    When I have the area narrowed down, i will try filling out taxes

    by Elaine — July 13, 2013

  9. Choose the best retirement calculator in which you’ll be spending less and gaining equally more with those who spent a lot. Retirement communities new york is a nice retirement community that’s worth saving for.

    by Anne Leah — August 18, 2013

  10. Anne Leah, Thank you for the lead on Stoneleigh Woods in Riverhead, New York. We have added it to our site.
    http://www.topretirements.com/reviews/New%20York/Riverhead/Stoneleigh%20Woods.html

    by Jane at Topretirements — August 18, 2013

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