A Comparison of the 8 Top Retirement Calculators
There are many retirement calculators available online that you can use to help you plan for your retirement. With all of the available options, it can be overwhelming to decide which one will be best for you to use in order to determine how to properly plan for your retirement. That is why we will evaluate many of the top retirement calculators to give you a better idea of what each offers, the difficulty level of using each one, and which could potentially be the best retirement calculator for you to use for your own personal situation.
Some of the easiest retirement calculators will break down the process into various tabs that will analyze specific parts of your retirement goals. For instance, the following 2 retirement calculators utilize tabs:
CNNMoney™retirement calculator breaks up the retirement calculations into 5 tabs -Goals, Income, Savings, Portfolio, Results.
AARP™ retirement calculator breaks up the retirement calculations into 3 tabs – “About You,” “Your Retirement,” and “Your Options.”
These tabs are to help organize your information in terms of whether you are married, what your current income is, what age you expect to retire, what your expected Social Security™ benefits will be, what savings and retirement accounts you currently have, how active and passive you are with your portfolio, etc. This information will be used to help determine what your expected retirement income will be if current trends continue in terms of what percentage of your current income you are saving, how much of an increase your current assets and income will grow, and how much Social Security you will have earned from the time you have spent working.
These calculators also adjust the dollar amounts based on the expected rates of inflation in the future, so you don’t have to try to adjust the dollar amounts for inflation on your own, making them great choices for the beginning retirement planner.
Other easy retirement calculators will just list various statistics you need to input into the calculator in order for it to determine whether you are saving enough for your retirement or not, such as the following two calculators:
These two retirement calculators are similar in terms of ease of use (relatively easy).
MSN Money™ is a little more comprehensive because it identifies the specific sources of income, such as “current annual income,” “current retirement savings balance,” “current annual savings amount,” and “annual pension benefit at retirement,” whereas FINRA’s retirement calculator only differentiates your sources of money as “current savings balance,” “annual retirement income,” and “other income.”
However, FINRA™ does provide instructions on the bottom of the calculator page that identifies some of the more obscure points, such as the “other income” combining all other sources of income, including Social Security benefits, employer pension funded plans, and other sources of income. As a result, both of these retirement calculators should be fairly easy to use for retirement planners.
Intermediate User Retirement Calculator
Bloomberg’s™ retirement calculator isn’t quite as easy to use as the previously mentioned retirement calculators because it doesn’t ask for much information – only your current age, expected retirement age, current amount in retirement fund, and expected annual rate of return
What makes Bloomberg’s™ retirement calculator a little more confusing is that it gives you two options, with the wording and advanced terminology being the confusing part:
“Enter annual contribution to calculate fund balance at retirement” (followed by a box with the proposed dollar amount to enter).
“Enter desired fund amount to calculate required annual contribution” (no box follows the wording here, but you’re actually supposed to use the box that is listed after the previous option for this option as well).
Essentially, the first option is asking how much you plan to place into your retirement fund at the end of each year (“annual contribution”). The retirement calculator will then calculate how much money you will be projected to have when you reach retirement (“fund balance at retirement”) using all of the information you’ve entered. The second option is asking you to enter the amount you expect your retirement fund (“fund amount”) to be when you reach retirement age. The retirement calculator will then use all of the information you’ve entered to determine how much your annual contribution will have to be each year in order to reach this desired retirement fund amount.
Bloomberg’s retirement calculator will show this information via a graph with two colored lines, your annual contributions in an orange line that is more linear, while your fund value is displayed in a blue line that is more of a curve.
The confusing wording and advanced terminology mentioned above, the misplaced box mentioned above, and the limited information the calculator asks for make this retirement calculator more of an appropriate choice for those with an intermediate knowledge of their retirement planning.
Some retirement calculators focus more attention on your portfolio of assets and how aggressive or passive you are with them. In order to use these retirement calculators, you have to have a better idea of how much you diversify your stocks, bonds, and other investments. While you can get a general idea from looking at your own portfolio, the choices you have may not exactly match up with the options the retirement calculator gives you.
More Advanced Retirement Calculators
For instance, the following retirement calculator from Schwab™ gives you five investment choices – Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive – and the percentages of stocks, fixed income, and cash investments are predetermined, with no option of altering them. This could potentially skew the results a bit in terms of defining your retirement income goals and how close or far away you are from reaching them:
Schwab™ retirement calculator also requires you to have a fairly knowledgeable idea of how much you plan to spend in retirement, either as an approximate dollar amount or as an approximate percentage of your total income (including taxes), in order to calculate whether you are saving enough for retirement or not. As a result, this retirement calculator is likely a better option for those who have an advanced knowledge of their retirement planning.
Similarly, the following retirement calculator from T. Rowe Price™ also requires you to have a fairly good grasp of the allocation of your assets, specifically when it comes to your stocks, bonds, and short-term assets. T. Rowe Price’s retirement calculator asks you to adjust the sliding bar to indicate each of the three. Alternatively, you can allow T. Rowe Price’s retirement calculator to apply a modeled projection of what your current portfolio allocation will lead to in terms of future portfolio allocation, and hence, your future retirement income.
T. Rowe Price’s retirement calculator does run through an alleged 1,000 market simulations to calculate how much you’ll likely have in cash and how much cash you’ll likely need to live through age 95, so it is quite thorough, but again, you’ll need to have a fairly good idea of your portfolio diversification in order to get the most benefit out of this calculator, making this retirement calculator a more appropriate choice for those with an advanced knowledge of their retirement planning.
The next retirement calculator from Kiplinger’s™ also requires a more-than-average knowledge of your assets. For instance, Kiplinger requires that you know offhand what your Social Security benefits are projected to be. You can either use the Social Security Administration’s own website to help calculate this or use some of the other retirement calculators presented here in order to do this. Additionally, you also need to know the amount of your monthly retirement pension income in order to get full use of this retirement calculator. Kiplinger suggests that you ask your benefits department for this specific information:
As a result, Kiplinger’s retirement calculator really requires you to have in-depth knowledge of your assets, making it a retirement calculator that is more suited for those who have an advanced knowledge of their assets.
Finally Retirement Calculators Ease of Use
Overall, while those intermediate and advanced retirement calculators (Bloomberg, Schwab, T. Rowe Price, and Kiplinger) can sometimes give you a more thorough picture of your retirement plan outlook, they take more in-depth knowledge to use them properly to gain that more thorough picture. For those who just want to have a fairly accurate idea of how well they are planning for their retirement, the four easier retirement calculators (CNNMoney, AARP, MSN Money, and FINRA) will likely suit most people’s financial planning needs.
No matter what retirement calculator you use, it’s important to recalculate your numbers every year or two to make sure you remain on track and to keep in mind that these are estimates based on input data, not exact projections, since your own personal circumstances and economic circumstances can vary from preconceived assumptions you have at this moment in time, which can greatly affect the actual results from the calculated estimates you have gained from using these retirement calculators.