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January 27, 2022
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 calculator will enable you to try different retirement scenarios – exploring infinite possibilities between working, saving, investing, spending, leaving something behind and more. There are hundreds of different variables that can dramatically impact your wealth, retirement date, estate value, and retirement security.
Below are 15 retirement plan categories with lots of different ideas for scenarios to try using a comprehensive retirement calculator. 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 one 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:
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.
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.
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.
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.
Instead of entering a retirement date, look for a retirement calculator that allows you to set different levels of work income for different periods of your life and play with those variables.
If not yet retired, you should also see what happens if you were to unexpectedly lose your job or not be able to work due to a health issue — both of which are fairly common scenarios.
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:
If you are not yet retired, it can be really motivating to model saving even just a bit more each year.
The NewRetirement system lets you set different savings rates for different periods of time. It can be interesting to experiment with when you might get a raise and adding all of that extra income or just a portion of it to your savings. Or, can you increase your savings rate by a certain percentage each year?
You can also experiment with saving to after tax or pre tax savings.
You can also specify employer matching if your company is contributing to your savings.
Be sure to also enter any times when you might be able to add a lump sum one time contribution to your retirement savings. Will you get a tax refund? Expecting an inheritance?
Playing with different spending rates can be the best way to strengthen your financial future. Can you cut costs?
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.
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 65 year old couple will be $285,000 — not even including long term care.
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. 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:
The NewRetirement system is the most comprehensive retirement planning calculator. This detailed tool 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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