4 Benefits of Using a Retirement Calculator

by Jason on August 16, 2010

If you have not already started planning for your retirement you should start today.

While everyone looks forward to their golden years a lot of people are afraid of retirement or have no idea what kind of retirement savings it will take to make for an enjoyable retirement.

One of the great tools available to help with your retirement planning is a retirement calculator.

As you might expect, a retirement calculator is more useful if you use it early in your working life. If you wait until you are just a few short years away from retirement age the calculator will only be able to tell you how much your income will be after you start working.

However, if you use the retirement calculator when you have thirty or forty years of work ahead of you it can give you a much better picture of what your golden years can look like and how to avoid retirement risks as well as plan to make your dreams come true.

What A Retirement Calculator Can Tell You

Income Target

The retirement calculator can figure out how much money you will need to make in order to have enough to live the life that you want after you stop working.

It not only takes into account the basics like food and housing but also the other things on which you spend money. It can then tell you how much you need just to get by and how much you will need in order to maintain your current lifestyle.

Interest Rates

One of the ways to earn money for your retirement is through wise investments. The calculator helps you figure out just how much interest you need to earn on your investments in order to meet your income goals.

Retirement Timeline

Your calculator can look at options for retirement dates. It can help you decide to retire early or delay retirement to spend a year or two extra working.

Principal Amounts

The principal amount of money you hold in your accounts will dictate how much interest you are able to earn. If you withdraw too much money you will stop earning interest, which is a big part of your retirement income.

A good calculator will help you figure out how much you need for retirement.  It will show how much you should put in to that account and how much you can withdraw and still maintain a balance that you are comfortable with and that maintains your interest earnings.

Here’s a great Retirement Calcuator at CNN Money that can walk you through your retirement planning.

Reviewing Your Progress with the Retirement Caluclator

As you go through life, your goals and earnings are likely to change. If you go back to the retirement calculator on a regular basis it will help determine if you are still on the right course or if you need to make changes to meet your goals.

Even if you have already retired the retirement calculator can still help you. By taking the time to plug in your financial numbers from time to time you can evaluate your spending to make certain you do not use up your nest egg too quickly.

Everyone looks forward to the time when they can stop working for good. We all dream of spending more time doing the things we really enjoy without the stress of working day in and day out.

The best way to make sure your retirement exceeds your expectations is to start planning early so that you have the funding you need to relax and enjoy your golden years.

Start as early as possible and use tools like a good retirement calculator and your retirement dreams will be easier and faster to reach then you imagined.

This article was written by William Eve. William writes about saving money, investment loans and real estate for Home Loan Finder. If your a first home buyer or looking to refinance, visit the Home Loan Finder website for great advice and to compare home loans today.

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