Money Saving Tips :: Retirement Savings Calculator
Retirement Savings Calculator:
Using a Retirement Savings Calculator to Plan for Your Future
It’s Never too Soon to Plan
As a young person, using a retirement savings calculator may be the furthest thought from your mind, but planning for retirement is important. The sooner you start saving, the better your chances of retiring with a healthy nest egg. As you will see when you use the retirement savings calculator, your age is a factor.
Finding a Calculator
So, the first step in using a retirement savings calculator is to find one. You can always visit a local bank or stockbroker, but these days, so much of what we need is easily available on the Internet. Therefore, step one is to go online and use a search engine like Yahoo or Google, and type in: “retirement savings calculator” and see what you get. There are plenty of them out there.
How to Use the Calculator
One key element of the retirement savings calculator is that it is generally tied to a 401(k) retirement plan. So, you will have to have one of those accounts to use it. Some calculators will want your current savings, but that is not always a factor.
Your monthly salary, and the percent you contribute to your 401(k), now those are critical factors. Next, if your employer contributes to your retirement fund, you enter their percentage. Then comes the tricky aspect of the calculation, the percent return you expect to get on your investment.
This can be very difficult to estimate; so it is always best to err on the side of caution. A rate of return of ten percent is not unreasonable. Finally comes the really important piece to the puzzle: how many years you have until you retire. The longer this period is, the better!
Once all this data is fed into the retirement savings calculator, you click on the “calculate” button, and it will tell you what the value of your 401(k) plan will be when you retire. That is the magic number, and it will tell you what you can expect to have in the way of money to support yourself. If you start early, and save, you can be assured of living comfortably for the rest of your life.
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