Retirement Savings Calculator

This retirement savings calculator can help you figure out how much money you should save each year to reach your retirement income goals.  The calculator uses your current age, household income, and current retirement assets to develop an annual retirement savings target.

       
  Retirement Savings Calculator  
  Current Age (Years)  
  Desired Retirement Age (Years)  
  Life Expectancy (Years)  
       
  Annual Household Income ($ / Year)  
  Anticipated Income Growth Rate (%)  
  Desired Income Replacement Rate (%)  
       
  Current Retirement Assets ($)  
  Expected Return on Investments (%)  
  Expected Pension at Retirement ($)  
  Social Security at Retirement ($)  
       
       
       
  Calculator Results:  
  Household Income at Retirement ($ / Year)  
  Desired Replacement Income ($ / Year)  
  Social Security and Pension ($ / Year)  
  Income Replacement from Savings ($ / Yr.)  
       
  Total Savings Required at Retirement ($)  
  Contrib. from Curr. Retirement Assets ($)  
  Retirement Savings Gap ($)  
       
  Ongoing Annual Savings Required ($ / Yr.)  
       

Calculator Definitions

The variables used in our online calculator are defined in detail below, including how to interpret the results.

Current Age (Years)

This is your current age in years.

Desired Retirement Age (Years)

This is your desired retirement age.

Life Expectancy (Years)

This is your life expectancy when you reach your estimated retirement age.  Many people mistakenly believe that life expectancies are in the range of 75 years of age.  However, that figure applies only at birth.  For example, at age 65, the average life expectancy is 83 years of age.

Annual Household Income ($ / Year)

This is your current annual household income, stated in dollars.

Anticipated Income Growth Rate (%)

This is your anticipated annual growth rate for your household income.  For example, if you expect to receive annual salary raises of 3.0% per year, then the growth rate is also 3.0%.

Desired Income Replacement Rate (%)

This is the percentage of your annual income you'd like to replace in retirement.  Once retired, many of your expenses should be lower.  For example, you probably would have paid off a mortgage, and your work-related travel expenses no longer apply.  For that reason, many financial planners recommend that your retirement income replace approximately 70% of your pre-retirement income.

Current Retirement Assets ($)

If you currently have retirement assets in a Roth IRA fund, traditional IRA, 401k, 403b, or some other kind of retirement account, then enter the totals of all those funds here.  If you have not yet opened any of these types of retirement accounts, then you can simply enter zero.

Expected Return on Investments (%)

This is the annual rate of return you expect to realize on all of your retirement investments between now and your expected retirement age.

Expected Pension at Retirement ($)

If your workplace provides you with a pension plan, then enter your expected pension retirement income.  Most pension plans replace between 20 and 40% of your pre-retirement income.

Social Security at Retirement ($)

If you expect the Social Security system to provide you with retirement income, then enter that amount here.

Household Income at Retirement ($ / Year)

This is your expected household income at your retirement age.  This value is based on your present annual household income, and it has been increased by the income growth rate you've supplied.

Desired Replacement Income ($ / Year)

Your desired replacement income is your household income at retirement, multiplied by the income replacement rate you've specified.

Social Security and Pension ($ / Year)

This is the total amount of annual retirement income you expect to derive from a pension plan and / or Social Security.

Income Replacement from Savings ($ / Year)

This is the income replacement gap that must be supplied by your retirement savings assets.  This value is the difference between your desired retirement income, and the annual income supplied by your pension and Social Security.

Total Savings Required at Retirement ($)

This is the total amount of savings required to fill the annual income replacement gap previously identified.

Contribution from Current Retirement Assets ($)

This is the contribution towards your total savings at retirement that you can expect from your current retirement assets.

Retirement Savings Gap ($)

This is the gap between what you need to have in retirement savings plans and the amount that can be contributed from your current retirement plans.

Ongoing Annual Savings Required ($ / Year)

This is how much money you need to contribute to retirement savings plans each year to ensure that you have enough money in your retirement savings plans to supply the total retirement income that you desire.


Retirement Savings Calculator - Copyright © 2006 - 2015 Money-Zine.com (Last Reviewed on January 24, 2015)


Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor.  The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.