Just starting out or well on your way, a retirement calculator helps you make the most of your money.
Retirement calculators are everywhere now, and the better ones can help you save more money. That means more retirement income when you need it, and a more effective way of getting it.
The calculator idea is simple, at least from the front end. Enter your information, and out pops your summary. On the back end, it’s sophisticated and takes many factors into consideration, from your standard of living to your geographical location.
It’s not really important to know how it works. What’s important is knowing that it works, and that using a retirement calculator can help you find a more secure future. The U.S. Department of labor says, “You’ll probably have to pay for more of your own retirement than earlier generations.” So the sooner you start, the better off you’ll be.
A Retirement Calculator is a Tool
First and above all else, a retirement calculator is a tool, and it’s the right tool to help you save more. A desktop calculator or a pad and paper could also work, but they don’t have as much to offer. That’s especially true for someone who isn’t well-versed in retirement planning.
A desktop calculator versus a retirement calculator is really not much different from using a butter knife to turn a screw. You could use it, but doesn’t a screwdriver do a much better job? A retirement calculator does a much better job.
Want more retirement income? Then you’ll need to invest more now.
Adjust the Numbers and Adjust Your Plan
The first thing that most people do is test a retirement calculator using the numbers that they have on hand. Even if you’re in your 40s, you still have about 20 years to get the right plan in order, says Time magazine. You can enter your current earnings, how much you have in investments, how much you contribute, and so on. That gives you a great baseline.
You can play around with the numbers with a tweak here and there to change the outcome. Increase you regular 401(k) contributions, and watch how it affects your plan in the long run. Seeing the improved numbers in black and white is different from theorizing about bumping up your contributions. It gives you a goal to reach for.
A retirement calculator shows possibilities, such as downsizing your home, that you might never have thought of.
Great Advice Give You Options
Above the flexibility of most retirement calculators is the advice that you can get along the way. Watch how your savings stack up against others, and also get some useful statistics. For example, did you know that according to NewRetirement, the average retired home owners have about $140,000 in equity, and that lifetime healthcare costs after 65 total about $200,000? Info like this gives you perspective.
Once you see your plan analysis, then you’ll get ideas on how to make it better. Maybe could rollover your IRA into a ROTH IRA and save on fees. Or sell your house and move to a smaller one and invest the equity in an annuity or other retirement income plan. The important part of the analysis is seeing where you are and then learning how to save more and improve your bottom line.
A retirement calculator can work for anyone. It creates a custom plan based on your details, not anyone else’s. And the recommendations that you get are based on real-life scenarios. And from beginning to end, you can plainly see all of the areas where you could save more, and you can also learn the outcome if you follow through.
NewRetirement is committed to helping people just like you learn about saving money and investing to create the happiest and most well-funded retirement years possible. Take our retirement calculator for a spin today, and find out just how many possibilities you have to save more money.
