With a retirement planning calculator, you have the opportunity to take a big picture glance across your savings and retirement investment portfolio, evaluating your progress and deciding where to make changes to continue investing towards your retirement planning goals. Retirement planning calculations are done in three parts. The first part is to decide how much you need to live on annually once you reach retirement. The second part is to figure out, factoring in inflation and market volatility, how much you need to save each year until the year you retire in order to give you the annual income you need after retirement. And the third part is to monitor your progress using retirement planning calculations to keep tabs on how your portfolio is performing and where you need to adjust your strategy to continue towards your goals.
A retirement planning calculator is a free tool you can find online through such reputable websites as CNN Money, MSN Money, and Bloomberg, among others. If you have a financial planning advisor that individual can also help you perform retirement planning calculations. To use a retirement planning calculator you will need to have handy your age now, your desired age of retirement, your life expectancy (this can be found by consulting ethnicity and gender-to-age charts), your current annual income, your expected future raises, and an analysis of your current income and savings. Simpler and more specific retirement planning calculations can be done with just a single calculation by entering your age now, the age you will be when you retire, how much you save each year, and the expected annual rate of return on your current retirement investments. The calculator will deliver back information on how much you will need to contribute each year to meet a certain goal you set for the value of your accounts at retirement.