Estate & Tax Planning Calculators

Retirement Planning

Many web sites now offer free "retirement calculators" to assist you with retirement planning. By providing a few details about yourself and your finances, these calculators calculate how much you need to save to achieve your retirement objectives. Below are links to four such calculators. The calculators differ on certain assumptions they make, such as the rate of earnings on investments and life expectancy, and will yield somewhat different results. Nevertheless, they can offer valuable insight into the factors to consider in planning for retirement. Using a retirement calculator should not replace the advice of a qualified attorney or financial adviser.

MFS
Fidelity
Kiplinger
AARP

Using calculators at MFS.com, Fidelity.com, and Kiplinger.com, ElderLaw News ran tests for its Winter 2000 edition using these two scenarios: (1) a 50-year-old couple earning over $100,000 per year who want an annual income of $60,000 when they retire in 15 years and who have $300,000 saved; and (2) a 60-year-old individual earning $50,000 per year, with $300,000 saved who wants $40,000 per year when retiring in five years.

The MFS calculator provides results that include full color bar graphs, charts, and suggestions on how to improve your situation. Using the default settings, which include a factor of 6 percent of income for the amount that would be contributed towards retirement savings, scenario (1) resulted in a depletion of savings by age 81. Scenario (2) resulted in a depletion of savings by age 75, five years short of the individual''s life expectancy. In short, according to MFS, both need to put more aside or postpone their retirement.

Fidelity''s calculator offers the opportunity to include additional details such as the amount you expect to make working part time after retirement, the amount you expect to receive in Social Security benefits, and your life expectancy. Its default setting is slightly higher for post retirement earnings on investments, at 7 percent versus MFS''s 6 percent. Applying scenario (1), this calculator indicated that the couple should begin saving an additional $251 monthly to achieve their goals. Scenario (2) required $2,168 additional monthly savings or 52 percent of income, unlikely to happen.

The Kiplinger calculator adds a couple of features, such as a life expectancy calculator and an adjustment for investment style, and keeps the whole process on one page. For scenario (1), it found that the couple should begin saving $2,564 annually, and for scenario (2) $4,854 a year, quite a bit less than Fidelity''s results.

Although the calculators yielded different results, this was a function of the variances in what the different companies suggested for additional relevant data. Whereas the Fidelity site presumes a life expectancy of 90 years, MFS and Kiplinger calculate life expectancy from tables. In addition, where MFS and Fidelity both indicate the numbers that they use for inflation and rates of return, and allow the user to adjust these, the Kiplinger site hides these numbers; it also compels the use of ranges for income and age.

Future Social Security Benefit

You can calculate your future Social Security benefits based on your current and projected earnings by using the online Benefits Calculator of the Social Security Administration (SSA). The Benefits Calculator can tell you exactly what the effects on your benefits will be of, for example, postponing your retirement or cutting back on your work hours. Using this calculator should not replace the advice of a professional retirement or financial planner.

Financial Calculators From the American Savings Education Council

More than 100 financial planning calculators are available at the American Savings Education Council's Web site. The calculators can help with a wide array of financial planning issues, including retirement planning, credit cards, home mortgages, and budgeting. Visitors to the site can start with The Ballpark Estimate, which offers users a way to obtain a rough first estimate of what they will need for retirement. The site also offers more finely tuned retirement calculators, including "What will my expenses be after I retire?", "How much effect can inflation have?" and "Which savings should be used first?" In addition to the retirement calculators, you'll find calculators for Roth IRAs, Stocks, Bonds, Mutual Funds, Home Equity Loans, Insurance and more. The Council, a coalition of private- and public-sector organizations, works to raise public awareness about what is needed to ensure long-term personal financial independence.

The Ballpark Estimate Worksheet
ASEC's Financial Calculators

Life Expectancy Calculators

How much you need for retirement depends a great deal on how long you expect to live. There are now many Web-based calculators that can give you an idea of your life expectancy based on your current age, gender, family health history, smoking and drinking habits, exercise patterns, stress level, and other important lifestyle choices.

Here are four life expectancy calculators, although we cannot yet vouch for their accuracy:

MSN Money
Healthy Ontario
Seattle Times

Federal Long Term Care Insurance Cost of Care in Your Area

LTCI

The SmartMoney.com LTC Insurance Evaluators

SmartMoney

Nationwide RetirAbility Check

Nationwide

Roth IRA Conversion Calculator

CalcTools.com