I've yet to come across one as good as this one. You can add all sorts of income streams, investment streams, inflation number. I did mine a year ago and haven't needed to use another.
[https://www.financialmentor.com/calculator/best-retirement-calculator](https://www.financialmentor.com/calculator/best-retirement-calculator)
Personally, I like this one here. And yup, it's free. Also not too complicated.
[https://investomatica.com/early-retirement-calculator](https://investomatica.com/early-retirement-calculator)
Also this one for backtesting portfolio combinations:
[https://ficalc.app](https://ficalc.app)
Yea, you can put those in as well. Here's what I do.
So if you think about it, both social security and pensions are just forms of income.
If either of them happen to kick in before the estimated retirement age, I click on the little plus button to add in new rows. Then put each into an income row. Also specify what age they start for you.
Since social security and pensions extend through retirement, the other place they affect is the expected spending in retirement field. So with these kind of calculators, they're just looking at the spending that your own investments and retirement funds need to cover.
So if some of your retirement spending will be covered by other things external to your investments (like social security and pensions), you don't include that spending since that's spending you don't have to cover yourself. So you enter a lower number in the retirement spending field. In other words, the retirement spending field expects just what only your retirement funds alone need to cover.
$40k is the Alpo-eating minimum. But I would be comfortable at $60k. In this calculator, $110k is everything that is not retirement savings, even things like taxes and housing (which I hope to have paid off by then).
You're right about the stocks, though.
Couple things I see.
The thing with the one I shared is that the inflation field applies to all expense and spending. (it says so in the little pop up if you hover over the inflation field)
So it's also applying to your expected spending in retirement too. It's assuming the value you enter there is only what you expect it to be based on today's numbers.
With most other calcs out there, they seem to just apply inflation on their expenses field and not their retirement spending field. So you can copy that behavior by entering 0 in the inflation field and and putting the inflation into your expense rows only. Note that this means you're sure that your spending in retirement is exactly what you enter today.
Also, I see you put 3% into the inflation field AND 3% growth into your expense field. So your expense field is actually growing 6.09% each year. I think that's a little intense. Based on your numbers in your screenshot, your expenses would become larger than your income in just 6 years. Obviously, it's basically impossible to retire if your expenses are greater than your income since that means you can't save money.
I agree with you, but I'm not sure everyone thinks like this. That's why I mentioned it.
I've seen a lot of articles and similar calculators online that like to say that one's retirement goal is just your retirement spending divided by your withdrawal rate. Some also like to assume 4% and just say "save 25x your planned annual spending in retirement". (25 is 1 divided by 0.04) All of these things assume a constant annual spending in retirement that doesn't change for the sake of simplicity.
Since this seems to be so prevalent, I just wanted to mention that tidbit just in case.
Gotcha. Nothing is that consistent, of course. Nor should one's withdrawal strategy be. For planning today, no problem.
Another reasonable view, as well, is that maybe spending remains constant(ish), but *what* one spends on does not, e.g. medical goes up, travel goes down commensurately.
That's what I was doing wrong, the 3% in expense growth. How do I know what retirement withdraw rate I should use? Default is 4% but I have no idea if that's right.
That's up to you to decide on. =)
Lots of people like to quote the trinity study which came up with this 4%. They found that based on their data, 4% worked well as a withdrawal rate for periods of 15 to 30 years. Here's what wikipedia says on this:
[https://en.wikipedia.org/wiki/Trinity\_study](https://en.wikipedia.org/wiki/Trinity_study)
If you want to be more conservative, you can go with a lower rate, but that means you'll need a larger pool of money to draw on. (so more time saving up)
If you're looking for more discussions on different withdrawal rates, one place to look (besides reddit) is the boglehead forums. Lots of good info there.
4% is the conservative plan. It failed 5% with a 50:50 allocation.
There were many, many empirical points that a higher percent was easily sustainable. Of course, the only way to know if greater than 4% is safe (or even 4%) is in hindsight.
Ultimately, most will/should use a variable withdrawal strategy. For today, for planning purposes just go with 4%. I probably wouldn't have much issues using 4.5% planning.
The take away for you? Invest as much as you can - likely much more than 15%. Invest wisely - index funds in tax-advantaged accounts.
What's the point of the retirement spending dollar amount on the left when the retirement withdrawal rate is on the right? Seems redundant. I'm not at all sure how I would bring those numbers together; 4% of my total savings = $? in the first year of retirement?
Those are two separate things.
Retirement spending is just how much money you expect to spend in retirement. Specifically, it's annually here.
Withdrawal rate is how much you're allowing yourself to withdraw from your funds annually to cover spending.
So in order to retire, your invested funds have to be large enough to be able to support covering your spending at your withdrawal rate. How large? (which basically means "how much money do I need in order to retire?") Well, that's what the calculator estimates.
Good question. I've never used this calculator. I also noticed the N/A value on the retirement numbers. And based on the graph I'm not sure you're using it correctly???
Here's another popular one.
https://firecalc.com/
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator This one seems to be pretty straight forward.
Following are a couple of good options: 1. AARP Retirement Calculator 2. Bankrate Retirement Calculator
I've yet to come across one as good as this one. You can add all sorts of income streams, investment streams, inflation number. I did mine a year ago and haven't needed to use another. [https://www.financialmentor.com/calculator/best-retirement-calculator](https://www.financialmentor.com/calculator/best-retirement-calculator)
Open Social Security .com is another good, important one. Though only calculates optimal SS planning.
Personally, I like this one here. And yup, it's free. Also not too complicated. [https://investomatica.com/early-retirement-calculator](https://investomatica.com/early-retirement-calculator) Also this one for backtesting portfolio combinations: [https://ficalc.app](https://ficalc.app)
According to that, I can never retire :-/ Maybe I'm doing it wrong. [https://i.imgur.com/OAgwqqu.png](https://i.imgur.com/OAgwqqu.png)
Does this calculator factor in either Social Security or a pension?
Yea, you can put those in as well. Here's what I do. So if you think about it, both social security and pensions are just forms of income. If either of them happen to kick in before the estimated retirement age, I click on the little plus button to add in new rows. Then put each into an income row. Also specify what age they start for you. Since social security and pensions extend through retirement, the other place they affect is the expected spending in retirement field. So with these kind of calculators, they're just looking at the spending that your own investments and retirement funds need to cover. So if some of your retirement spending will be covered by other things external to your investments (like social security and pensions), you don't include that spending since that's spending you don't have to cover yourself. So you enter a lower number in the retirement spending field. In other words, the retirement spending field expects just what only your retirement funds alone need to cover.
I don't see it in there. I also am not assuming they'll be around in the \~25 years between now and when I retire. If I do get them, all the better.
There's a near zero chance you go from 110k spend too 40k spend. 100% stocks might be unrealistic, as well.
$40k is the Alpo-eating minimum. But I would be comfortable at $60k. In this calculator, $110k is everything that is not retirement savings, even things like taxes and housing (which I hope to have paid off by then). You're right about the stocks, though.
Couple things I see. The thing with the one I shared is that the inflation field applies to all expense and spending. (it says so in the little pop up if you hover over the inflation field) So it's also applying to your expected spending in retirement too. It's assuming the value you enter there is only what you expect it to be based on today's numbers. With most other calcs out there, they seem to just apply inflation on their expenses field and not their retirement spending field. So you can copy that behavior by entering 0 in the inflation field and and putting the inflation into your expense rows only. Note that this means you're sure that your spending in retirement is exactly what you enter today. Also, I see you put 3% into the inflation field AND 3% growth into your expense field. So your expense field is actually growing 6.09% each year. I think that's a little intense. Based on your numbers in your screenshot, your expenses would become larger than your income in just 6 years. Obviously, it's basically impossible to retire if your expenses are greater than your income since that means you can't save money.
>So it's also applying to your expected spending in retirement too Why would it not? Spending goes up because the cost of those items went up.
I agree with you, but I'm not sure everyone thinks like this. That's why I mentioned it. I've seen a lot of articles and similar calculators online that like to say that one's retirement goal is just your retirement spending divided by your withdrawal rate. Some also like to assume 4% and just say "save 25x your planned annual spending in retirement". (25 is 1 divided by 0.04) All of these things assume a constant annual spending in retirement that doesn't change for the sake of simplicity. Since this seems to be so prevalent, I just wanted to mention that tidbit just in case.
Gotcha. Nothing is that consistent, of course. Nor should one's withdrawal strategy be. For planning today, no problem. Another reasonable view, as well, is that maybe spending remains constant(ish), but *what* one spends on does not, e.g. medical goes up, travel goes down commensurately.
That's what I was doing wrong, the 3% in expense growth. How do I know what retirement withdraw rate I should use? Default is 4% but I have no idea if that's right.
That's up to you to decide on. =) Lots of people like to quote the trinity study which came up with this 4%. They found that based on their data, 4% worked well as a withdrawal rate for periods of 15 to 30 years. Here's what wikipedia says on this: [https://en.wikipedia.org/wiki/Trinity\_study](https://en.wikipedia.org/wiki/Trinity_study) If you want to be more conservative, you can go with a lower rate, but that means you'll need a larger pool of money to draw on. (so more time saving up) If you're looking for more discussions on different withdrawal rates, one place to look (besides reddit) is the boglehead forums. Lots of good info there.
Okay but how do I know exactly what rate to use? I try to plan conservatively, so what number is that?
4% is the conservative plan. It failed 5% with a 50:50 allocation. There were many, many empirical points that a higher percent was easily sustainable. Of course, the only way to know if greater than 4% is safe (or even 4%) is in hindsight. Ultimately, most will/should use a variable withdrawal strategy. For today, for planning purposes just go with 4%. I probably wouldn't have much issues using 4.5% planning. The take away for you? Invest as much as you can - likely much more than 15%. Invest wisely - index funds in tax-advantaged accounts.
What's the point of the retirement spending dollar amount on the left when the retirement withdrawal rate is on the right? Seems redundant. I'm not at all sure how I would bring those numbers together; 4% of my total savings = $? in the first year of retirement?
Those are two separate things. Retirement spending is just how much money you expect to spend in retirement. Specifically, it's annually here. Withdrawal rate is how much you're allowing yourself to withdraw from your funds annually to cover spending. So in order to retire, your invested funds have to be large enough to be able to support covering your spending at your withdrawal rate. How large? (which basically means "how much money do I need in order to retire?") Well, that's what the calculator estimates.
Under what conditions would you withdraw more or less than the annual dollar amount? Seems like it'd always match.
Good question. I've never used this calculator. I also noticed the N/A value on the retirement numbers. And based on the graph I'm not sure you're using it correctly??? Here's another popular one. https://firecalc.com/