Retirement Calculator
A retirement calculator is the very best available tool for determining the ideal savings and investment strategies to enable you to have enough financial resources to live well throughout your retirement years.
Time For A Retirement Calculator
You will need to update certain calculations periodically as the nation’s economy, the financial climate, and pension and investment opportunities change.
Of course, your own personal finances, living situation and investment holdings may also vary over the coming months and years.
At the outset, however, you should know that different retirement calculators exist for different people usually depending on the nature of their employment.
Those working in the US army, navy or forces should consult a military retirement calculator while ex-government employees need to look at a FERS retirement calculator.
Many people simply require information about planning or saving for their retirement. For those purposes, you are advised to consult a retirement planning calculator or retirement savings calculator.
Important Retirement Calculator Variables
In order to compute your specific retirement planning figures and percentages completely and accurately, a retirement income calculator must compute such relevant data as:
Your Current Savings Balance
The amount in dollars which you currently have saved for your retirement.
Your Annual Retirement Income
How much money you will need annually, after taxes, to meet your expenses and lifestyle requirements. This dollar amount must equal at least 70% of your current yearly income.
Other Sources of Income
For example, Social Security benefits, employee pension plans.
Your Annual Yield
(e.g. 6%) – the amount of interest and gain on your savings, retirement accounts, stocks and mutual funds.
The Inflation Rate
(e.g. 4%) – the estimated average annual rate of inflation from the present time through your retirement years.
Your Current Tax Rate
(e.g. 28%) – you current federal tax bracket.
Your Retirement Tax Rate
(e.g. 25%) – the federal tax bracket you anticipate being in when and after you retire.
Your Current Age
Be honest!
Your Retirement Age
65 for those born before 1960. If you were born in or after 1960, your retirement age is 67, when you will be eligible to receive full Social Security benefits.
Whether or Not to Inflate Contributions
If you choose YES, your invested amounts will increase annually by an amount equal to the yearly inflation rate. If you choose NO, all annual investment increments will be equal.
Withdrawal Until Age
(e.g. 85) how many years you will have need of your retirement income.
Whether or Not Annual Contributions Are Tax Sheltered
Choose YES if your investments are placed in tax deferred accounts like a retirement IRA or a 401(k). Choose NO if your investments are taxed by the IRS as income each year.
Which Retirement Calculator Should You Be Using?
One of the best tools currently available to the public on the Internet for calculating all of the above data is the FINRA Retirement Calculator. FINRA (the Financial Industry Regulatory Authority) is the most comprehensive independent regulator for all securities firms doing business in the US. FINRA now regulates the activities of nearly 631,700 registered securities officers and representatives.
The American Institute of Certified Public Accountants offers retirement plan calculations which include the expected rate of inflation. The Consumer Price Index (CPI), the commonly accepted computation of US inflation rates revealed a long-term average annual rate of 3.1% between 1925 and 2009. However, the CPI for 2009 as released by the Minneapolis Federal Reserve was – 1.0%.
Retirement Calculator For FERS and CSRS Employees?
During a six-week timeframe in 2010, upwards of 20,000 federal employees made use of the popular FedCalc Retirement Calculating Services in order to facilitate their professional retirement planning.
This helpful retirement planner is used extensively by FERS employees (Federal Employees Retirement System) and those who qualify as CSRS employees (Civil Service Retirement System).
In most cases, all federal departmental and postal workers who were hired prior to 1984 are CSRS employees, unless they chose FERS coverage in an open season in 1987 or 1989.1
In addition, this retirement tool is also used by US military personnel, law enforcement staff, firefighters and postal workers for future personal retirement calculations.
This service is conveniently free for personal use. In addition, for the reasonable annual fee of $189.95 benefits planners and financial administrators can be licensed for professional use.
FedCalc enables government and military employees of all types to plan retirement dates and details without delay. At the same time, FedCalc computations include use of updated annuity calculation formulas and all relevant current interest rates. Amounts computed will be as accurate and exacting as any you may obtain by using the CSRS calculations from official handbooks and worksheets.
FedCalc is also unique in its calculations of High-3 salary figures. Your High-3 salary number is drawn from your most recent salary history, including at least the past three years.
Don’t Underestimate The Value of a Retirement Calculator
Clearly, state-of-the-art modern and highly accurate retirement calculating devices are of utmost value and importance to anyone looking ahead toward retirement years. Whether you are a young business employee, working professional, government or civil service worker, or a member of the US Armed Forces, you should begin to plan for the lifestyle you desire during your retirement years.
Remember, retirement planning is not just for the elderly. You need to save, invest and plan while you are still in your youthful years in order to enjoy a healthy and happy life later on when you and your loved ones are elderly. Without doubt, one of the most helpful aids to accomplishing this task is a comprehensive and accurate retirement calculator.
Make a point of finding the one most suitable for planning your future today. You will surely reap a myriad of benefits by using an appropriate retirement calculator in your later years.
