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December 14, 2023
There is so much more to retirement planning than having enough savings. And, you have more options than you think when it comes to having a secure retirement. A comprehensive retirement planning tool will enable you to try different retirement scenarios – exploring infinite possibilities between working, saving, investing, spending, leaving something behind and more.
There are literally hundreds of different variables that can dramatically impact your wealth, retirement date, estate value, and retirement security.
Below are 20 retirement plan categories with lots of different ideas for scenarios to try using a comprehensive retirement planning tool. As you experiment with these ideas for your finances, you will be able to:
You can try any of the ideas listed below in a few of the detailed and comprehensive retirement planners that are available online. However, a simple retirement calculator won’t work for running most of the following scenarios.
The NewRetirement Retirement Planner is the most comprehensive online tool and is the only option that enables everything listed here and more. This tool has the added benefit of giving you real time feedback on each and every change you make to your plan. Whenever you alter a piece of your information, the system calculates how that change impacts your:
With the NewRetirement Planner, you have two options when trying “what ifs” in your plan. You can:
Running through these popular retirement planning scenarios will increase your planning know-how and build your confidence for achieving a secure future.
Let’s start with the obvious: running scenarios on when you are going to retire. Most retirement calculators ask you to enter your “retirement date.”
However, retirement age just doesn’t mean that much anymore. The reality for most of us is that we either transition toward retirement by going part time or we retire and then get some kind of retirement job. Others take a break from work and then resume in some capacity a year or two later.
Run scenarios where you:
There is a big difference between how much you need to retire securely if you live until age 75 vs living until age 95 or longer.
However, most retirement calculators use average life expectancy and don’t let you deviate from that at all even though the average life expectancy is essentially meaningless to most of us. Half of us will live longer than average and half of us will not live that long.
When planning your retirement, you should probably use your best case longevity age – the longest you think you might live. You could also try a longevity calculator to get a more personalized estimate.
In 2017, congress passed the Tax Cuts and Jobs Act (TCJA). This legislation reduced taxes for many people and corporations. However, without further legislative action, the tax cuts are set to expire at the end of 2025 and 2026 tax rates and tax brackets will be higher for most households. Learn more about TCJA.
The NewRetirement Planner enables you to toggle between the current tax brackets and rates and what they will become at the beginning of 2026 if no further legislative action occurs.
This toggle is available on the My Plan > Assumptions page in the tax section.
If you are interested in reducing your tax burden, be sure to investigate the Tax Insights. Look for opportunities to reduce taxable income in certain high tax years.
Most people don’t realize just how valuable waiting to start Social Security is to their retirement security.
If you have not already started your benefits, you should definitely look up how much you will get at different ages and plug those numbers into a comprehensive retirement planner. Most people are really surprised by how much the delay can positively impact your financial well being throughout retirement.
And, if you are married, try different starting ages for both yourself and your spouse. Additionally, you will want to look at what happens to your plan if the higher earner defers the start of benefits as long as possible up until the maximum retirement age of 70. Don’t focus on who is older. Or, who retires first. The key is to make sure the highest earner grabs the highest possible payout. This is probably the single smartest retirement decision married couples can make.
There is no predicting the future with total accuracy. When planning, you need to try to anticipate the unknown, prepare for a range of outcomes, and be nimble when things don’t turn out the way you thought they would.
The NewRetirement Planner can help you with this in two basic ways. You can:
Both methodologies have merit and it is useful to explore both. And, you can toggle to your optimistic, pessimistic or average forecast and assess your Monte Carlo projection using those sets of assumptions.
If you are not yet retired, it can be really motivating to model saving even just a bit more each year.
Playing with different spending rates can be the best way to strengthen your financial future. Can you cut costs? What happens if you spend more and take that round the world cruise?
Consider playing with the following scenarios:
It can be very interesting to model spending using different methods and compare results. For more ideas, explore 9 tips for predicting retirement expenses.
You might also look at modeling a Roth conversion to assess the impact of this option.
A Roth conversion is when you take money that you have in a traditional 401k or IRA account and move it into a Roth 401k or IRA.
When you do this, you will need to pay taxes on the money you withdraw. However, any future gains will grow tax free. Learn more about the pros and cons of roth conversions and how to use NewRetirement to model future conversions.
Not all retirement calculators allow you to enter pension income.
If you are lucky enough to have a pension, you should definitely use a calculator that allows you to document pension income, including COLA adjustments, tax status of benefits and survivor benefits.
You will probably also want to compare getting a lump sum vs. monthly benefit.
For most people, their home is their asset with the greatest value. However, only a few think through scenarios of how and when to tap their home equity to help with retirement expenses.
Here are a few future changes to housing that you might want to try out:
If you are near retirement age and have other debt (credit card, medical, auto loan, etc…), then you might want to think of ways to accelerate paying off these liabilities.
Explore 13 tips for retirement debt.
Medical expenses are HUGE for everyone. Fidelity estimates that the out of pocket costs for an average retired couple age 65 in 2023 will be $315,000.
Different retirement planning calculators have different ways of dealing with medical costs. The NewRetirement system helps you to create a personalized estimate by using your health status, location, type of coverage and other factors that impact your costs.
Like medical expenses, inflation can be a really big factor for your financial security.
Inflation is a term used to describe the increase in the general prices of goods and services. Inflation describes prices increases. For example: If a loaf of bread costs $1 and inflation is at 3%, then the cost increases to $1.03.
Over the last 50 years, inflation rates have ranged between a high of 13.5% in 1980 to a low of -.4 in 2009. (The more recent high was 9.1% in 2022.) You should definitely try different inflation rates in your plan and estimate how well you can weather highs and lows.
When projecting income and expenses for 20 plus years into the future, it can be easy for these categories to get out of sync. You might have more income than expenses in some years and the opposite at other times.
The NewRetirement planning calculator lets you accumulate this debt. You can also see your excess income and can decide how you want it applied.
Learn more about the excess income feature.
According to the U.S. Department of Health and Human Services, long term care is required for at least some period of time by the vast majority – a full 70% – of people over 65. However, most households underestimate the costs of long term care and don’t have a good plan for this very big expense.
You should try out different scenarios in a retirement calculator for covering these costs:
Are you expecting to inherit funds? While you don’t want to count your chickens before they hatch, including a potential inheritance can have a significant impact on your future wealth and security.
If you are anticipating a future windfall, you can model scenarios with (and we advise without) the money.
If you are married, you aren’t just planning for yourself, you need your money to last for your spouse as well. The Planner models your future plan throughout the lifetime of the longest living spouse, but you can investigate and evaluate the full financial picture of the surviving partner with tips from this Help Center article.
Investment returns are something many retirees are pretty worried about. Why not use a retirement calculator that lets you set returns for each account that you actually have? You should probably also play with different configurations.
What would happen to your overall plan if you were to:
Most retirees hope to leave something behind for heirs. A good retirement calculator will help you see what might be a reasonable expectation and let you set goals for an inheritance.
Set an estate goal and see the impact on your Chance of Success.
One of the most rewarding scenarios to run is one in which you input exactly what you realistically want to happen in the future: dream vacations, a long life, relocation to be near the grandkids, an inheritance for your heirs, and more.
If it turns out to be realistic, congratulations. If you fall short financially, start working backward and making financial trade offs to see how you might come closest to the future you dream of. Prioritize what is really important to you, try different ways to make it work.
The NewRetirement Planner is the most comprehensive retirement planning tool available online. It is designed for anyone who is worried about their retirement — especially people nearing the end of their careers or just beginning this stage of life. It is easy to get started, see a personalized assessment and find ways to strengthen your plan.
Best of all, your data is always saved so it is easy to try different scenarios, make adjustments and manage your finances moving forward.
This tool has been named a best retirement calculator by the American Association of Individual Investors, Forbes Magazine, The Center for Retirement Research at Boston College, CanIRetireyet and many more.
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