| 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
happened when you were 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. |
Pre-retirement
Rate
of Return : |
This
is the annually compounded rate of return
you expect from your investments before
taxes. The actual rate of return is largely
dependant on the type of investments you
select. For example, for the last thirty
years the average annual rate of return
for domestic equity stocks has been about
10%. Savings accounts at a bank pay as little
as 2%. For the purposes of this calculator
taxation is not factored into the results.
|
Post-retirement
Rate of Return : |
This
is the rate of return expected during retirement.
It is often lower than the return earned
before retirement due to more conservative
investment choices to help insure a steady
flow of income. For example, a balanced
portfolio of stocks and bonds may earn two
to three percent less each year, but would
be less susceptible to dramatic stock market
fluctuations. |
| Percent
of Income to Save : |
The
percentage of your annual income you will
save for your retirement goals. |
| Expected
Salary Increase : |
Annual
percent increase you expect in your household
income. |
| Years
until Retirement : |
Number
of years before retirement. |
Years
of
Retirement Income : |
Total
number of years you expect to use your retirement
income. |
| Percent
of Income at Retirement : |
The
percent of your working year's household
income you think you will need to have in
retirement. This amount is based on your
income earned during the last year you will
work. The default is 70%. You can change
this amount to be as low as 50% and as high
as 150%. |
| Are
You Married? : |
Check
this box if you are married. Married couples
have a higher maximum social security benefit
than single wage earners. |
| Include
Social Security? : |
Check
this box if you wish to include social security
benefits in your retirement planning. |
| Expected
rate of inflation : |
What
you expect for the average long term inflation
rate. |
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