Julie Jason: Retirement calculator can provide insight on financial … – CTPost

There is a familiar question that often comes up when people look at the money they have set aside for retirement: “Am I saving enough?”
If you have found yourself asking that question, know that you are not alone. A survey released in November 2021 by Bankrate, a consumer financial services company, found that 52% of respondents said they were behind on their retirement savings. The 2022 State of Retirement Planning study by Fidelity, also a financial services company, revealed that 1 in 4 people said they were less confident about retiring how and when they wanted to than they were in the past, based on the events of the past two years.
The good news is that you can find some possible answers to your retirement savings question by using a retirement calculator.
AARP has one at tinyurl.com/nth5rtc2. It can offer an idea of where you stand financially in anticipation of retirement someday in the future.
The calculator requests information about your age, your current salary, your retirement savings and your household status. To get a more complete picture, you can add details about financial items like your pensions and Social Security, your expected lifestyle in retirement and when you plan to retire. (The Social Security section will let you estimate your benefit if you are not sure what it will be; the original resource you’ll want to use is the Social Security website — tinyurl.com/2p9xfn86.)
Once you’ve entered your information, you’ll see a page with the projected minimum you will need to retire, what you will have saved, and the sources and percentages of where your retirement money will come from (displayed in a graph).
The calculator is based on the assumption that you will need about 85% of your “current lifestyle” expenses in retirement. You can view and edit that assumption, along with other basic economic projections, including inflation rate (a hot topic these days), your tax rate in retirement and your life expectancy age, by clicking on the “view and edit” link.
AARP isn’t the only source for a calculator to help evaluate your retirement outlook. The Financial Industry Regulatory Authority (FINRA), which oversees the brokerage industry, offers one at tinyurl.com/58fm8t23. FINRA’s calculator involves answering 13 questions, along with background details related to each question if you click on the blue circle.
Once the calculation has been completed, you will see a retirement analysis, along with a chart detailing your projected retirement savings balance on a yearly basis, plus tips to help you get to your savings goal. FINRA does issue the following caution: “The retirement calculator was designed to help investors plan a basic investing strategy. While it is a helpful tool, you should understand its limitations. The results generated by this calculator are hypothetical.”
Other sources for various retirement calculators include financial firms such as Fidelity (tinyurl.com/2p83s3cr), Vanguard (tinyurl.com/4pvj2cnj) and Charles Schwab (tinyurl.com/4ntkyax4).
If you use a retirement calculator, it’s important to remember that they offer estimates about the future based on certain assumptions that you’ll have to review when using the calculator.
For youthful future retirees, a retirement calculator can provide incentives to get organized and to set savings goals. For those who are closer to retirement, a retirement calculator can help confirm that they are on track or that more work needs to be done. In either case, this is valuable information and definitely worth a little time to explore. If you do, let me know your thoughts. Email me at readers@juliejason.com.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2021 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of Julie’s columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.


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