Decide if you are going to
continue to work after your “formal” retirement and if yes, estimate
how much that job will pay. This is entered as “Supplemental income” on the calculator.
Gather this personal information:
Age you plan to retire
Investment risk style
Current annual household income
Current retirement savings amount
Amount you save for retirement each year
If you will receive SS benefits, when
will you start and how much will your benefit be. Note: This calculator will automatically plug in an estimated benefit from Social Security if you desire.
Estimate your annual living expenses
Some weaknesses with this calculation:
It does not cover
spouses. The Social Security amount is estimated for the
individual. Double check your projected SS benefit against
the estimate entered by the calculator.
The life expectancy is 90 years of age
Investment return before and after
retirement is estimated. Read the fine print to determine rates
The inflation rate is assumed at 2.6%. It might be higher.
The amount of "Supplemental income" does not have a date when it stops. If this is
a retirement job, the calculator will overstate your other retirement
income since you will probably stop working at some point.
Remember that you will get out of this what you put into it. Use this procedure for a quick calculation,
but do not plan the last 20 – 30 years of your life using it.