Retirement Pension Planner

Do you know what it takes to work towards a secure retirement? Use this calculator to help you create your retirement plan. View your retirement savings balance and your withdrawals for each year until the end of your retirement. Social Security is calculated on a sliding scale based on your income. Including a non-working spouse in your plan increases your Social Security benefits up to, but not over, the maximum.

RESULTS_MSG

END_OF_RETIREMENT_MESSAGE This is based on retirement expenditures of INCOME_REQUIRED_AT_RETIRE per year. This amount is INCOME_PERCENT of your last years income of INCOME_AT_RETIRE. SOCIAL_SECURITY_MSG **GRAPH**

To help meet your goal, you may wish to do one of the following:

  • Increase contributions to ADJUST_SAVINGS_RATE of your income (ADJUST_ANNUAL_SAVINGS annual savings, which INCREASE_ANNUAL_SAVINGS increase as your income increases)
  • Increase your rate of return before retirement to ADJUST_ROR.
  • Reduce your required income at retirement to ADJUST_INCOME_REQUIRED of your final year's income.
  • Delay your retirement until age ADJUST_YEARS.
Retirement Plan Inputs
Current ageCURRENT_AGE
Age of retirementAGE_OF_RETIREMENT
Household incomeHOUSEHOLD_INCOME
Current retirement savingsCURRENT_SAVINGS
Annual retirement savingsSAVINGS_PERCENT (ANNUAL_SAVINGS annually which INCREASE_ANNUAL_SAVINGS increase as your income increases)
Expected income increaseSALARY_PERCENT
Years of retirement incomeYEARS_OF_RETIREMENT
Income required at retirementINCOME_PERCENT
Company pension monthly incomeOTHER_PENSION_AMOUNT1 per month starting at age OTHER_PENSION_START1
Spouse pension monthly incomeOTHER_PENSION_AMOUNT2 per month starting at age OTHER_PENSION_START2
Investment Returns and Inflation
Rate of return before retirementPRE_RATE_OF_RETURN
Rate of return during retirementPOST_RATE_OF_RETURN
Expected inflation rateINFLATION_RATE
Are you married?MARRIED
Include Social Security?INCLUDE_SOCIAL_SECURITY
Result Summary
Years until retirementYEARS_UNTIL_RETIREMENT
Your last year's incomeINCOME_AT_RETIRE
Estimated annual retirement expendituresINCOME_REQUIRED_AT_RETIRE
Your ending balanceENDING_BALANCE

Balances by year*

**REPEATING GROUP**

* Understand that the likelihood of this scenario unfolding exactly as portrayed is extremely remote. It is based on the assumption that fixed rates of return, that don't vary from year to year, will apply to your entire retirement portfolio.

Retirement Pension Planner Definitions

Current age
Your current age.
Age of retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement savings. So if you retire at age 65, your last contribution occurs when you are actually age 64. This calculator also assumes that you make your entire contribution at the end of each year.
Household income
Your total household income. If you are married, this should include your spouse's income.
Current retirement savings
Total amount that you currently have saved toward your retirement. Include all sources of retirement savings such as 401(k)s, IRAs and annuities.
Rate of return before retirement
This is the annual rate of return you expect from your retirement savings and investments. This should also be an after tax rate of return if the majority of your retirement savings is not in a tax deferred account such as a 403(b), 401(k), 457(b), annuity or IRA. The actual rate of return is largely dependent on the types of investments you select. The S&P 500® for the 10 years ending Dec. 31st, 2013 had an annual compounded rate of return of 7.3%, including reinvestment of dividends. From January 1970 through the end of 2013, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Rate of return during retirement
This is the annual rate of return you expect from your investments during retirement. This should also be an after tax rate of return if the majority of your retirement savings is not in a tax deferred account such as a 403(b), 401(k), 457(b), annuity or IRA. This rate is often lower than the return earned before retirement due to more conservative investment choices to help insure a steady flow of income. The actual rate of return is largely dependent on the types of investments you select. The S&P 500® for the 10 years ending Dec. 31st, 2013 had an annual compounded rate of return of 7.3%, including reinvestment of dividends. From January 1970 through the end of 2013, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.

It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.

Annual retirement savings
The percentage of your annual income you plan to contribute to your retirement savings. This should include any 403(b), 401(k), or 457(b) plans and your employer's contribution to these plans. It should also include any other retirement accounts such as an IRA or a Roth IRA and any retirement savings in non-retirement accounts. This calculator assumes that you make one annual contribution at the end of each year, and any withdrawals happen once per year at the end of the year.
Expected income increase
Annual percent increase you expect in your household income.
Years of retirement income
Total number of years you expect to use your retirement income.
Income required at retirement
The percentage of your pre-retirement household income you think you will need in retirement. This amount is based on the household income earned during the year immediately before your retirement. You can change this amount to be as low as 40% and as high as 160%. The percentage should reflect an after-tax amount if the majority of your retirement savings is not in a tax-deferred savings account such as a 401(k), IRA or other tax-deferred account.
Expected rate of inflation
This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2013 the CPI has a long-term average of 3.0% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2013, the last full year available, the CPI was 1.7% annually as reported by the Minneapolis Federal Reserve.
Married checkbox
Check this box if you are married. Married couples have a higher maximum Social Security benefit than single wage earners.
Include Social Security checkbox
Check this box if you wish to include Social Security benefits in your retirement planning. Social Security is based on a sliding scale depending on your income, how long you work and at what age you retire. Social Security benefits automatically increase each year based on increases in the Consumer Price Index. Including a spouse increases your Social Security benefits by 1.5 times your individual estimated benefit. Please note that this calculator assumes that only one of the spouses work. Benefits could be different if your spouse worked and earned a benefit higher than one half of your benefit. If you are a married couple, and both spouses work, you may need to run the calculation twice - once for each spouse and their respective income. This calculator provides only an estimate of your benefits.

The calculations use the 2014 FICA income limit of $117,000 with an annual maximum Social Security benefit of $31,704 ($2,642 per month) per year for a single person and 1.5 times this amount for a married couple. To receive the maximum benefit would require earning the maximum FICA salary for nearly your entire career. You would also need to begin receiving benefits at your full retirement age of 66 or 67 (depending on your birthdate). This calculator rounds your age of full Social Security benefits to the next highest full year. If your birthdate is between 1955 and 1959 your actual full retirement age for Social Security is 66 plus two months for each year after 1954. Your actual benefit may be lower or higher depending on your work history and the complete compensation rules used by Social Security.

Company pension monthly income
This is the monthly pension benefit you expect to receive when you retire. This amount is not adjusted for inflation. Please note that this calculator doesn't include the impact of income taxes on your income.
Spouse pension monthly income
This is the monthly pension benefit your spouse expects to receive at retirement. This amount is not adjusted for inflation. Please note that this calculator doesn't include the impact of income taxes on your income.


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