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Senior Retirement Tips :: 401K Calculator
401K Calculator: Finding the Best 401K and Retirement Calculator
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There are hundreds, if not thousands, of websites offering a 401K calculator or retirement calculator - all promising to show you exactly how much you need to save for your retirement.
However, each of these tools use different calculation strategies and different assumptions, meaning they all give you different advice.
To compare the numerous 401K calculators out there, we inserted the same numbers, including savings rate, life expectancy and income into three various online and free calculators.
As an example test subject we used a single, 45-year old male currently earning $50,000 per year with a small mortgage, $90,000 in a 401K and a savings rate of about 10% per year. Our “test subject” has a goal of retiring in 20 years (at 65) and living on $50,000 per year with a life expectancy of 100 years old.
Keep reading to find out what each 401K calculator recommended and how they measured up.
Calculator: Ballpark Estimate (URL: http://choosetosave.org/ballpark)
Ballpark recommended that our test subject needed to save just over 55% of his annual income to retire in 20 years with an annual retirement income of $50,000 per year. Changing the retirement age to 70 and even 75 lowered that rate significantly.
The site took about 10 minutes to input our information and produce the results. It was simple to use and lets you add additional or unconventional income sources. Unfortunately, the results can be confusing to read and if you want to fiddle with your figures, you need to start over from scratch.
Calculator: Nationwide's Retirability (URL: http://nationwide.com/nw/nrri/index.htm?wtgo=retirability)
Nationwide's retirement calculator tool actually gives you a score based your readiness for retirement. Our test subject scored 88, a poor ranking when 100 and up should be your overall goal.
The site took just under 8 minutes to input our information and come up with its results. One major feature of Nationwide's 401K tool is that it includes home equity as part of your assets, and considering that most Americans wind up tapping into that equity, it's more accurate.
Calculator: AARP (URL: http://www.aarp.org/money/financial_planning/ then select "Retirement Planning Calculator" link)
The AARP calculator had some grim results, telling us we needed to save over $1600 a month to reach our goal (which is significantly higher than the $416 a month our test subject is currently saving).
The 401K calculator took about 10 minutes to use and though not as flashy as the other tools on this list, it provided clear and easy-to-understand results that were complimented by a graph and easily editable variables.
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SeniorRetireTips.com :: 401K Calculator