| Your retirement calculator is probably giving you | | | | calculator that asks for five to eight inputs and then |
| wrong answers and you don't know it. Almost every | | | | calculates the answer. That is not enough data to |
| free Internet retirement calculator I evaluated is | | | | accurately calculate your retirement and you put your |
| inaccurate. This is shocking when so many people are | | | | entire retirement at risk. |
| using these calculators to plan their retirement years. | | | | Do not trust a retirement calculator that is sponsored |
| By the time they discover the errors it may be too | | | | by a company that can sell you financial services. |
| late. | | | | If you want a quick snapshot of your retirement |
| Why does just about every retirement calculator | | | | plan, use the American Association of Retired People |
| give incorrect or incomplete answers? Because they | | | | Retirement Calculator or the CNN Money Retirement |
| are not really designed to perform accurate | | | | Calculator. However, do not use these for serious, |
| long-term calculations. Rather, most are designed as a | | | | long-term retirement planning. |
| sales tool to attract you to do business with the | | | | Look for a retirement calculator that has most of the |
| company that sponsors the calculator on its website. | | | | following features:o It should allow you to enter your |
| For those of you who are fishermen or fisherwomen, | | | | information and your spouse's information |
| the calculator is the "bait". You enter the limited | | | | separately.o It should allow for income from a |
| amount of requested data into the calculator, and it | | | | retirement job and have a start date and a stop |
| tells you that your retirement is headed for disaster. | | | | date for that income.o It should have an allowance |
| You panic at this revelation. The company then "sets | | | | for lump-sum changes to your portfolio. This could be |
| the hook" by offering to help you formulate a plan | | | | the proceeds from the sale of your home. An event |
| for your retirement so you will be able to live very | | | | of this size makes a significant difference in your |
| well in your retirement years. | | | | retirement plan.o It should allow for Social Security |
| Another inaccuracy of most retirement calculators is | | | | input for both you and your spouse.o It should |
| the amount of replacement income the calculator | | | | include inputs for pensions (if applicable).o It should |
| recommends. Replacement income is the amount of | | | | allow you to select different spending models for |
| income you will require in retirement to maintain your | | | | your retirement (Examples: Constant, Bernicke's, |
| preretirement standard of living. Replacement income | | | | Percentage of Remaining Portfolio)o It should allow |
| is usually stated as a percentage of your working | | | | you to specify the type of portfolio you hold |
| income before retirement. A very common | | | | (Conservative, Moderate, Aggressive) |
| percentage for replacement income is seventy-five | | | | Make no mistake. Using the best retirement calculator |
| percent (75%). Solid research shows that you can | | | | will require work on your part. You will need to do |
| retire on much less than the 75 - 80% replacement | | | | your homework and properly prepare the input for |
| income recommendation used by the financial | | | | the calculator. However, you are planning the last |
| services industry. | | | | years of your and your spouse's lives and you want |
| A couple of "do not's" for you to consider: | | | | those years to be the very best for both of you. |
| Do not trust your future retirement to a retirement | | | | You two deserve nothing less. |