How to Use a Retirement Contribution Calculator

By Shannon C , last updated October 13, 2011

Learning how to use a retirement contribution calculator can literally mean the difference between retiring and having enough money to live on, and finding out too late that you have saved too little. You will want to use these handy retirement contribution calculators, which are offered free of charge from major financial planning websites such as BankRate and Bloomberg's, regularly to ensure that your retirement contributions are keeping up with inflation and readying you for the lifestyle you dream of enjoying during your retirement years.

While different types of retirement contribution calculators can be structured somewhat differently, overall you will need certain key pieces of information in order to use a retirement contribution calculator. You will need to know both your current calendar age as well as the age you expect to retire at. You will also need to know how much your current contributions to date amount to, and the current average rate of return that those contributions are accruing annually. You can average these numbers, but be sure your average is close enough to give you a good approximation of what you are likely to have in your account upon retirement.

Now that you have all of the information assembled, all that you need to do is plug in each of these numbers in the appropriate places in the retirement contribution calculator program and press the "submit" button. You can also use a retirement contribution calculator to create scenarios, adjusting your retirement contributions and rate of return up or down to see how the amount you will accrue upon the age of your retirement will shift accordingly. You may want to print out the results and use them to consult with your financial analyst or retirement planning specialist to adjust your investment portfolio to more closely match your retirement income goals.

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