A Retirement Calculator will help you plan an investment strategy so that you can spend your retirement years peacefully. There are various types of calculators to plan your future retirement strategy.
Most of the Retirement Calculators have features to calculate your savings, income, age and contribution. Some of these features are :
- Current savings balance : Calculate your current savings balance which is the amount you have saved for your retirement.
- Current Age : Put your current age.
- Current Tax Rate : Put your present federal tax bracket.
- Other Income : This is for expected sources of income for retirement. It can include employer funded pension plans, external sources of income, or Social Security.
- Calculation of Annual Retirement Income : Plan how much money you need to live post retirement. This amount is needed to insure all your expenses in the year. Do not enter less than 70% of your current income if you want to maintain your present living standard.
- Annual Yield : This is your expected rate of return. It is better to consult a prospectus for mutual funds and stocks.
- Inflation Rate : This is the expected average annual inflation rate over the period surrounding your retirement years as well as the remaining working years.
- Retirement Age : Determine what age you will retire. One thing you must remember is that the official retirement age for Social Security purposes is increasing for those born in 1938 or later. As a result, you will be eligible for full Social Security benefits if you were born in 1960 or later.
- Retirement Tax Rate : After retiring, what tax bracket do you anticipate to be in.
- Tax Sheltered Annual Contributions : This feature gives you a “yes” and “no” option. You can select yes if you have investments in a tax deferred account like a retirement IRA or a 401(k) plan. Select “no”, if federal income tax is imposed on your investments annually.
- Withdraw Until Age : The years needed for your annual retirement income.
- Inflate Contributions : You can increase your amounts of investment to account for inflation over the investment period.
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