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 Retirement Calculators to Help You Determine Your Required Retirement Savings

  Retirement Calculator Image #32

A U.S. Government Sanctioned Retirement Calculator

Surprising Result for Many Canadians and Americans When They Enter Their Personal Financial Data into a Retirement Calculator: "According to your latest figures, if you retire today, you can live very comfortably until 4 p.m. tomorrow."
— Dave Erhard

How much money do I need to retire? Good question! It would be nice to punch three or four numbers into a simple retirement calculator, punch two or three more keys, and calculate retirement income based on a number that allows us to retire happy, wild, and free.

Before you can use even a simple retirement calculator to estimate how much you need to save to provide the retirement income you want, it's probably best to calculate your current financial situation. You want to know how you are spending your present income, how much you are saving for retirement, and the average rate of return those savings and investments are presently generating. An estimate of when you would like to retire and how long you expect live are also necessary.

The next step is to calculate your required retirement income to provide you with all your wants in retirement. Keep in mind that most retirees live on a lot less once they retire than when they were working. You can find eight major reasons why retirees need a lot less income in my international bestselling book How to Retire Happy, Wild, and Free (over 425,000 copies sold and published in 11 languages).

Retire Happy Book 

Retirement calculators are not the holy grail, however. Fact is, how much money anyone needs for retirement is a wild guess at best, regardless who does it. There are too many parameters and these keep changing daily. The best retirement plan is to save at least 25 percent of your income once you turn forty and don't rely on the government any for your retirement income. A simple retirement calculator can then be used to determine how to spend any government money if it comes your way.

I have never budgeted and didn't start saving for retirement until I was in my forties. In fact, I semi-retired when I was 35 and had a net worth of minus $30,000. Even though I have worked less than half of my adult life and have never made a penny in house appreciation (simply because I rented for over thirty years), I can retire comfortably.

The Joy of Being Retired

365 Reasons Why Retirement Rocks —and Work Sucks!

by Ernie J. Zelinski

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It was J.P. Getty who said, "People who don't respect money don't have any." This precisely explains why so many people will be broke in retirement.

Having said this, the following link gives a pretty good simple retirement calculator for how much money you need.

1. Retirement Income Calculator: Take an educated guess at how much money you will have to spend in retirement by estimating your retirement benefits at this U.S. Government website. If you currently have enough Social Security credits to qualify for benefits, you can use the Retirement Estimator for a retirement estimate based on current law and real time access to your earnings record.  The estimator provides an estimate of your retirement benefits comparable to the estimate you receive on your Social Security Statement each year, and lets you create additional "what if" retirement scenarios.

2. The Vancity Retirement Calculator:  This is my favorite retirement calculator for Canadians. Although the Vancity Retirement Calculator is designed for Canadians, Americans can easily substitute Social Security for Canadian Pension, etc. What's really cool is that with this simple retirement calculator you can play around with the different rates of projected inflation and projected rates of returns
for investments. The Vancity Retirement Planner Calculator can help estimate the amount of savings that you may want for retirement. Punch in your numbers for your age, your estimated date of retirement, the number of years before you pass away, your financial needs for retirement and your various expected sources of income to get a sense of how long your money will last or how much you should have when you pass away. Make sure to create the graph that gives you the full picture. By flagging any shortfalls or surpluses, the calculator outlines the savings you may need to reach your financial goals for retirement.


Below are the results that I got using another American retirement calculator that is no longer available.



Based on the assumptions you entered, you have now saved enough to allow you to replace 77 percent of your final wages (this includes income from Social Security).

The percentage of total salary you will need to save from now until retirement age to achieve your desired income replacement rate is 9 percent .

The dollar amount you will need to save this year is $6,94  1.

Use Back Button to Modify Some Assumptions

1.   Your current age = 60   

2.   Your current wage = $75,000.00

3.   Planned retirement age = 65   

4.   Desired replacement rate =   80%

5.   Expected age of death = 80   

6.   CPI = 3%

7.   Wage growth = 5%

8.   Rate of return on investments (nominal) BEFORE you retire = 5%

9.   Rate of return on investments (nominal) AFTER you retire = 4%   

10.   No you do not expect to receive defined benefit plan benefits

Questions     11   and   12   do not apply. 

13.   Part-time income at retirement age in inflated (future) dollars = $24,000.00

14.   Other income at retirement age in inflated (future) dollars = $1,000.00   

15.   Amount currently saved = $400,000.00

16.   expected initial monthly Social Security benefit:      $1,000.00   --this is from the ss calculator

expected initial annual Social Security benefit: $12,000.00  --calculated field for annual 

Use Back Button to Modify Some Assumptions

Retirement Calculator Designed by a MoronRetirement Calculator Image

Are all simple retirement calculators created equal? Not at all!
In fact, it's best to beware some of the free retirement calculators on the Internet. You may wind up dying on the job at 85, still trying to make enough money to fund your retirement.
Here is an example of a free retirement calculator designed by a moron.
I found this a calculator at (website no longer in service)  .
Apparently this retirement planning calculator was compliments of Raymond James.
I punched in my age of 60, my intended retirement age of 65, required living expenses of $40,000, estimated equivalent of Social Security Income (CPP and Old Age Pension in Canada), current savings of $600,000 (including equity in my home), estimated annual rate of 5 percent for after-tax return on my retirement portfolio, and an annual rate of inflation of 3 percent.
These are the results that I got: 
a) Savings at retirement $765,768.94
(b) Required savings at retirement $1,831,653.04
(c) Difference $1,065,884.10
(d) Additional annual savings $176,884.22
The results from this retirement calculator are absurd. 
Why would I need retirement savings of $1,831,653.04 at age 65 if I intend to live 15 more years and require living expenses of $40,000 a year? 
Retirement Calculator Image #3 
Other Retirement Calculators 

Most major financial institutions offer retirement calculators as a means of trying to attract business through their websites. Aside from the retirement calculators offered by the major financial institutions, there are many others that you can utilize. Here are some of them:

Choose To Save: Created by the Employee Benefit Research Institute, this financial website offers savings tips, retirement calculators, and links to retirement resources to help you plan your retirement.

Yahoo Finance Retirement Tools: Offers retirement information and a variety of retirement calculators to help you with your retirement planning.

Social Security Estimator: For Americans: On this government website you can estimate your future Social Security retirement benefits at different ages using different future earnings projection.

 Should You Use a Financial Planner

Sixty-seven percent of retirees in a recent Bank of America survey said they don't work with a financial adviser for retirement planning. Fifty percent of non-retirees said they use a financial adviser and 44 percent said they intend to work with a financial adviser to determine how to increase their financial assets when they retire.

One of the biggest problems with the financial planning industry is that any salesperson can call themselves a financial planner or a financial adviser and most do. Near as I can tell, it doesn’t take much to get a business card that says, Financial Planner.

Indeed, during the great recession, many people have turned to careers in financial planning, a number who are likely themselves broke due to mishandling of their own finances. Needless to say, you don't want to use one of these "financial planners' to advise you on how to save your money and spend your money.

What you may want is a financial planer with a CFP designation. CFPs distinguish themselves because they must have a minimum of three years experience in the field, have passed a rigorous slate of exams to receive certification and are obligated to uphold ethical standards. Only about a quarter of financial planners have CFP distinction.

Two additional popular qualifications you might see are the CRPC - chartered retirement planning counselor - held by those who specialize in retirement planning, and the ChFC - chartered financial consultant - held primarily by insurance specialists who have studied and practiced financial planning.

Last, a certified public accountant (CPA) could also be a used as personal financial specialist if he or she has had additional financial planning education, or a CFP.

 Perhaps You Should Use Advice from Retirees Instead of Advice from a Financial Planner

Interestingly, a majority of wealthy Americans said they are concerned that they won’t have enough retirement income to last through their lifetimes, according to a 2010 Bank of America Corp. survey. This is the new retirement, apparently.

The BOA survey said 53 percent are concerned about making sure retirement assets will last. Fifty-nine percent of retirees also said rising health-care costs are a concern. More than half of non-retired respondents made some adjustments to their lifestyles last year, such as spending less on personal luxuries or giving less to charities, and 29 percent said they expect to retire later than originally planned, the study said.

Perhaps retirees can provide valuable retirement planning advice to these wealthy individuals and to us, which is all that we need, without having to hire a financial advisor.

In a recent survey conducted on behalf of Merrill Lynch Global Wealth Management, retirees were asked where they would recommend those within ten to fifteen years of retirement focus their attention on retirement planning and where those more than fifteen years from retirement should be focused:

Within Ten - Fifteen Years of Retiring:

  • Create a retirement plan around what is most important to you (51 percent).
  • Have a retirement plan to manage income throughout retirement (47 percent).
  • Pay down debt before retirement (40 percent).
  • Account for unexpected costs and risks such as health care, cost of living and/or market fluctuations (38 percent).
  • Pursue home ownership (24 percent).
  • Be cautious of taking investment risks (21 percent).

More Than 15 Years Before Retiring:

  • Create a retirement plan around what is most important to you (43 percent).
  • Pay down debt before retirement (41 percent).
  • Have a retirement plan to manage income throughout retirement (39 percent).
  • Account for unexpected costs and risks such as health care, cost of living and/or market fluctuations (38 percent).
  • Work with a financial advisor if you don't already (25 percent).
  • Pursue home ownership (25 percent).

No doubt if you follow the financial advice of these retirees, you willl do okay. Again, as J.P. Getty said, "People who don't respect money don't have any."

One week into retirement, you'll be so damned bored that you'll want to stick bicycle spokes into your eyes. You'll probably opt to look for another job or start another company. Kinda defeats the purpose of waiting [for retirement], doesn't it.
— Timothy Ferris in The 4-Hour Workweek

"It [retirement] was absolutely boring. You can't go and say, 'I'm retired now. That's it!' It won't take long and you're really gone for good and someone throws the last shovel of dirt on a coffin with your name on it. That's the moment you're really retiring — when you die."
— Ozzy Osbourne

What Sort of Legacy Will You Leave to Your Children and Grandchildren?

Will Any of These Be Your Retirement Story?

  • Retired at 60 and vegetated until he died at 68!  
  • Retired at 65 and watched 10 hours of TV every day for the rest of her extremely boring life!  
  • Took early retirement and lost all her retirement savings at the casino because she didn't know what else to do with her time!  
  • Retired early, got extremely bored, and then tried to return to his old job that he hated, couldn't get it back, found a job that he hated even more, and had to retire again because of poor health!  

It Doesn't Have to Be That Way! 

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Make the most important investment that you can  make for your retirement right now:

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A gold watch is the most appropriate gift for retirement, as its recipients have given up so many of their golden hours in a lifetime of service.
— Harry Mahtar

The requirements for successful retirements
are, of course, simple to map out: Begin saving earlier in life, set aside larger
percentages of your pay, invest wisely in low-cost funds, avoid debt, pay off
your mortgage, defer Social Security to boost payouts, and work past traditional
retirement age to make sure you don't run out of money. Stay healthy, too, so your medical expenses don't eat you alive.
We might as well complete this fairy tale by advising you to make sure you find a job with a traditional pension, and
to only work for employers with AAA credit
ratings and great health insurance.
— from US NEWS

Sometimes it's important to work for that
pot of gold. But other times it's essential to take time off and to make sure that your most important decision in the day simply
consists of choosing which color to slide
down on the rainbow.
— Douglas Pagels  

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Everyone needs a reason to put their shoes on in the morning [when they retire]. If you put on the slippers, you'll end up
dragging your feet all day.
— Norma Fagan


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Whatever the challenge of a new age, in the end what really counts is not the years in our lives but the life in our years. It is not about longevity, but the depth of life. Long ago I learned that age does not wither the mind if people remain positive. No one is too old to set another goal or to dream a new dream. It is a mind game. As Churchill suggested, "The empires of the future are the empires of the mind."
— Singapore Retiree Jennie Chau



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