Chen: NewRetirement’s calculator is designed for anyone who is worried about their retirement — especially people nearing the end of their careers who are in their 50s and 60s.
While savings and investments are an important aspect of the tool,
We help people figure out how to draw down their savings as well as think through things like Social Security, income streams, Medicare, work and phased retirement and how to manage debt, expenses and out-of-pocket medical costs to live as securely as possible. For any of these subjects, there is a world of information and strategies that could really change how you are living in retirement.
Our tool is really unique in that it combines all aspects of retirement planning into one holistic system.
Chen: The research is pretty clear that the vast majority of people are really financially unprepared for retirement, but there are actions anyone can take to improve their situation.
The first step is to figure out what assets you have and what assets you will need. Then you can start making adjustments to make those two numbers come together.
The good news is that people have a lot more in “assets” than just their savings. Delaying the start of Social Security, working part time-for a few years, tapping home equity or lowering costs are all awesome ways to make retirement work.
While the NewRetirement calculator makes suggestions for improving your situation, the tool lets people set their own priorities and change all aspects of their profile, enabling them to discover their own best way forward.
We hope to help people discover their own solutions.
Chen: I think it changes over a person’s life cycle. When people are younger retirement may seem far away. Also, in the current economic environment, we are seeing Millennials delay the start of everything including getting jobs and forming households. For families with kids, very often the costs of education crowd out retirement savings and there is some recent research to support this.
Finally, when people are empty nesters and getting serious about saving for retirement, more and more people are finding career challenges as they hit their mid- to late-50s due to ageism.
Overall, I think that people treat retirement as an “urgent should” since they have a hard time envisioning it. We are trying to break down the problem and make it more tangible and manageable.
Chen: Yes – and due to a number of factors. First, women are still tasked with more responsibility around raising children, so they are super busy and many take time from their careers which hurts their ability to save AND hurts their earning records which lower their Social Security benefit. Furthermore, women also take on a caregiver role for adult parents which again hurts their ability to earn and save money.
I am in my 40s and while the tool is optimized for people age 50+ right now, I use it every couple of months and it’s great for keeping me motivated to save for retirement. The best thing I can do right now is to save and invest wisely – keep costs low and rebalance my portfolio. The tool lets me see how much I need to save and it has also helped me learn about interesting retirement saving strategies like using a Solo 401k.
Working on the problem of retirement planning also motivated me to finally buy a house which has acted an enforced savings mechanism. Home equity will play a huge part in most retirement plans.
