Best Retirement Calculators




Best Retirement Calculators
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Best Retirement Calculators

  Which are the best retirement calculators?


The majority of retirement calculators on the Internet are wrong.


This is a bold statement!  Why are so many wrong?

Because most are sales tools for the companies that place them on their websites.  These are called "teaser" retirement calculators.  They are designed to portray your financial plan using some of the worst assumptions.  These calculators grab your attention so you will seek financial planning help from the company that owns the website. evaluates Internet retirement calculators and recommends only the best retirement calculators that are designed to perform accurate retirement planning calculations.

Another reason that so many retirement calculators are wrong is they have not kept current with the life style of the Boomer generation.

Merrill Lynch Survey - 2005

In 2005, Merrill Lynch conducted a landmark study to project how future retirees would handle their retirement.  The results of the study concluded that “Yesterday’s Calculators are Outdated.

The study went on to say, “It reflects a departure from a time when an advisor could insert a client's simple financial profile into a calculator to determine assets at a particular point in the future when they could be drawn down upon. That model fails to capture the complexity of boomers' lives particularly that they may want and be able to earn partial incomes after their retirement "turning point."

Many of the retirement calculators on the Net are “yesterday’s calculators” that the Merrill Lynch study referenced.

Be very cautious of using this type of retirement calculator for your retirement planning because it will tell you that you must save much more for your retirement than the best retirement calculators will.  This is because the newer retirement calculators are built to reflect the “new retirement” patterns of the Boomer Generation.

Conflict of Interest

Also, there is a definite conflict of interest with the old style calculators if they are sponsored by investment firms.  The investment firms make money by encouraging you to invest with them so they encourage you to invest as much as you can.

Laurence Kotlikoff, Professor of Economics at Boston University, is an outspoken critic of the old style retirement calculator.  He maintains that some of these old calculators project that a person will need five times the retirement savings that she/he actually needs.  Because of this inflated savings requirement, Kotlikoff says that people tend to invest in riskier investments with higher returns to reach the large goal.  This is not a safe way to invest for your retirement.

Dr. Kotlikoff developed ESPlannerBASIC, a free retirement planner, to help people project a level standard of living over their lifetime.  A review of this outstanding planner is included later on this website.

Two Schools of Thought

There are two schools of thought about how to determine the amount of savings needed for retirement.  The old school with the outdated retirement calculators uses the income replacement method which estimates a percentage of your pre-retirement income you will need for retirement.  The second school of thought uses the life cycle theory of saving which has been developed by economists.

PBS Video about retirement planning

I recommend this video from PBS Nightly Business Report in which Paul Kangas interviews Cecil Hemmingway of Aon Consulting and Laurence Kotlikoff, Professor of Economics at Boston University, about the two methods they use for retirement financial planning.  The video is 9:53 in length, but it is worth watching to properly understand the difference in the retirement calculators that are available today.  This will tell you that you may not need to save nearly as much as your old style retirement calculator is telling you.


The best retirement calculators give you better answers than the old calculators, but as you would expect, they require more information than the old calculators to properly calculate your results.


To properly use the best retirement calculators, you need some basic information which is addressed in the following paragraphs.


What is your life expectancy?


There are many tools for this.  Several of them are listed for your use on the Best Longevity Calculators page.  This link will open a new window.  To return to this location and continue, close the Longevity Calculators window.


What are your plans for using Social Security?


The two key questions about Social Security are:

  • When do you plan to start drawing Social Security?

  • How much will your (and your spouse's) Social Security payment be?

To help you with this, go to Social Security benefits.  This link will open a new window.  To return to this location and continue, close the Social Security window.


What are your projected living expenses in retirement?


Rather than take your required retirement income as a percent of your income just before retirement, calculate your "real" living expenses in retirement.


Using information from the Bureau of Labor Statistics, we can find what the average couple spends for basic and discretionary living expenses.  For help with this, go to retirement living expenses.  This link will open a new window.  To return to this location and continue, close the Retirement Living Expenses window.



What is your projected income from a "retirement job" (if you want one)?


Many Boomers are planning to continue with some type of income generating activity after retirement.  This has a very positive impact on preserving your retirement savings and keeping you active and mentally sharp.


Once you have answered these questions, you are ready to use the Best Retirement Calculators.


Proceed to the Best Retirement Calculators

Author’s Note:  The "New Retirement Survey" by Merrill Lynch in 2005 is available on the Business Wire website.

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