15 401K Calculators and Retirement Calculators Worth Checking Out

The purpose of a 401K Calculator is to calculate the compound interest growth and future value of your monthly 401k contributions. To achieve this, you will be asked to provide some basic information such as your beginning balance, an estimate for all contributions that include yours, your employer match and any catch-up contributions, an expected annual rate of return and the number of years until retirement.  Retirement Calculators, however, are more in-depth retirement planners that allow the modern retiree to plan a retirement with multiple sources of income and assets such as phased-in income, part-time earned or business income, income from rental property and other sources of income.  Some of them also allow you to input spousal data at the same time.

Not all 401K calculators are retirement calculators are created equally and there is a lot of controversy on their use.  There are many different 401K Calculators and retirement calculators available and they all differ slightly. All the 401K and retirement calculators require some  basic information that you need to enter into the fields like how much money you plan on saving each year and your expected annual rate of return.  You may also be asked your retirement age, life expectancy, inflation, portfolio size, and expected retirement expenses.

The following is a list of 401K Calculators and retirement planning calculators that are currently available to use for free on the internet.  We’ve separated the retirement calculators into Modern Retirement Calculators and Simple 401K Calculators and recommend that you try out a few of the different ones and find out which ones best meet your planning needs.  Financialmentor.com recommends that you keep in mind that a retirement calculator is a valuable tool only when used properly, but can dangerously mislead you when used improperly.  They also advise that all retirement calculations are just mathematical projections of input assumptions to form hypothetical estimates.

Modern Retirement Calculators

Financial Mentor – The Ultimate Retirement Calculator – This retirement calculator has more functionality than most. It does all the usual forecasting of retirement savings needs, adjusting for inflation, etc. that other retirement calculators do consistent with the way people used to retire, but in addition it allows you to plan a modern retirement with phased income, part-time business income, real estate income, and much more.

Flexible Retirement Planner – The Flexible Retirement Planner uses a Monte Carlo Simulation to help you build a state-of-the-art retirement simulation that models your retirement rather than simply calculating it. The planner describes the results in terms of your plan’s “probability of success”.  To help you capture the exact details of your plan, the planner supports a wide range of user inputs with an additional input page that can give you even more control over how the planner simulates your retirement. . In addition, it implements the latest research on retirement spending Decision Rules.  The flexibleRetirementPlanner lets you model this to get a better picture of how well your retirement plan might do in real life.  Note you need to have Java installed on your computer to use the planner.

ESP Basic Planner – ESPlannerBASIC is the free, simplified, on-line version of the company’s patented, personal financial planning software.  This in depth retirement calculator suggests how much you should spend, save, and insure each year to achieve a stable living standard, now and through retirement, without borrowing.  It can also help you raise your spending power and make lifestyle decisions. It shows the living-standard impacts of changing jobs, contributing to retirement accounts, having children, down-sizing your home, retiring early, waiting to collect Social Security, and much more.  ESPlannerBASIC considers your economic resources, federal and state taxes, and “off-the-top” (non-discretionary) spending on housing, college, etc. in making annual discretionary spending, saving, and life insurance suggestions.   You can use ESPlannerBASIC free of charge as long as you don’t sign in and your data will be saved for a few hours. If you want to save your data on an ongoing basis, you will need to register and buy a $40 license.

Marketwatch – A great, easy to use retirement planner that you can use to see if your retirement is on track based on your current spending goals.   The planner lets you customize your assets, income and retirement spending and further refine your retirement plan by adding detailed assets and income.  This is one of the few calculators that lets you include your spouse into the equation so you can get a complete picture by inputting both parties current age, retirement age, last salary, held assets, savings and any future income including social security and your yearly retirement spending.

AARP Retirement Calculator –  The AARP Retirement Calculator can provide you with a personalized snapshot of what your financial future might look like. You will be asked to answer a few questions about your household status, salary and retirement savings, such as an IRA or 401(k). You can include information about supplemental retirement income (such as a pension or Social Security), consider how long you intend to work and think about your expected lifestyle as a retiree. The tool will help you determine the amount of money you’ll need to retire when – and how – you want.

T.RowePrice Retirement Income Calculator – This award-winning retirement planner can assist you in calculating how much you may be able to spend each month and how long your savings will last. Use this retirement calculator to better manage your financial assets and get the most value from your retirement savings.  You need to register before you can use this calculator so be aware that based on your inputs, T.RowePrice will suggest next steps for you to consider, including products and services from the T. Rowe Price family of companies that can help you meet your goals.

Simple 401K Calculators

Financial Mentor Simplified– Financial Mentor offers a simplified 401k Calculator that calculates the future value and interest earned on a current 401K balance and monthly contributions once you’ve provided an estimated rate of return and number of years to retirement.  According to their website, they believe it is wiser to keep this calculation very simple by assuming an average annual contribution in today’s dollars that balances for future growth in earnings, your unique employer matching situation, catch-up contributions, highly compensated employee limitations, and other variables. They suggest you just aggregate these various factors into a simple annual contribution and think exclusively in terms of today’s dollars.

FireCalc – An interesting strategy where FIRECalc shows you the results of every starting point, since 1871. You can get a sense of just how safe or risky your retirement plan is, based on how it would have withstood every market condition we have ever faced.   The assumption is that if your retirement strategy would have withstood the worst ravages of inflation, the Great Depression, and every other financial calamity the US has seen since 1871, then it is likely to withstand whatever might happen between now and the day you no longer have any need for your retirement funds.  So, if you accept that assumption, then just tell FIRECalc how much you have and how much you’ll be spending, and FIRECalc will tell you how often your strategy would have worked throughout history. Or what you need to change to make it all work.

AARP 401K Calculator –  AARP’s basic 401k calculator.

Money-zine.com – This simple to use 401(k) savings calculator can help you to figure out how large your 401k plan might be at retirement. The calculator will predict the 401k fund balance at retirement age, along with the annual income you might expect from this type of account

Calculator.net – This 401K calculator enables you to estimate your 401K balance at retirement as well as the payout after retirement based on income, contribution percentage, age, salary increase, and investment returns. If you can input a reasonable average annual inflation rate, you can get an approximation of the real value that the 401K balance will be at retirement age.

Bankrate.com –  A simple to use 401K Calculator that requires a percentage to contribute, annual salary, annual salary increase, current age, age of retirement, current 401k balance and annual rate of return, employee match, employer match ends

Bloomberg 401K Savings Calculator – A simple to use 401k saving calculator that even includes a catch up column that results is a retirement savings plan you can not afford to pass up.

Vanguard Nest Egg Calculator – This simple visual calculator determines how long your current nest egg will last you.  You first provide your desired number of years that your portfolio should last, your current portfolio balance and your current withdrawal rate.  You also need to provide the percentage allocation between stocks, bonds and cash. According to their description, the calculator determines these possible outcomes using a technique called Monte Carlo simulation, which involves simulating a large number of potential market scenarios—up and down markets of various lengths, intensities, and combinations.

Cori by Blackrock – An interesting retirement calculator that uses a CORI index based on your current retirement savings.  CoRI™ is powered by the CoRI Retirement Indexes (“CoRI Indexes”), which are a series of real-time, age-based indexes designed to help Americans measure retirement readiness and plan for future income goals. According to their website, each CoRI Index provides a daily “level” that can be used to estimate, as early as 10 years before retirement, how much annual lifetime retirement income your current retirement savings could generate.  If you’re 55 to 74 years old, CoRI Indexes can be used to get an instant estimate of the retirement income your current savings may provide.  You can find out more information about the CORI index here.

Should you incorporate home equity into your retirement-income plan?

A recent article on Marketwatch.com discusses a body of research showing that homeowners of all stripes should consider using a reverse mortgage in conjunction with their portfolio-withdrawal strategy.  According to the research, such loans, where you borrow from the equity in your home, can help you preserve your nest egg, leave a legacy, or both.

reverse mortgageThe story is based on in-depth research project by Wade Pfau, a professor of retirement income at the American College of Financial Services in Bryn Mawr, Penn, in which he compares and contrasts ways to incorporate home equity into a retirement income strategy along with the traditional portfolio.

According to Pfau,  “Strategic use of a reverse mortgage can improve retirement outcomes.”  Read the full story by Robert Powell on “How to use a reverse mortgage to protect your retirement income.”

A reverse mortgage is as a loan available to homeowners who are 62 years or older that allows them to convert part of the equity in their homes into cash,  monthly term or tenure payments or a line of credit.  The difference in a reverse mortgage vs a traditional mortgage is that instead of the borrower making monthly payments to a lender, the lender makes payments to the borrower.

A detailed guide on how a reverse mortgage works can be found on reversemortgage.org

New Rules for Social Security – Where to Find the Facts

There’s been a lot of hub around the internet this past week regarding President Obama signing the Bipartisan Budget Act of 2015 that limited two very popular Social Security claiming strategies known as “restricted application” and “file and suspend.

Both the “restricted application” and “file and suspend” strategies have been part of many married couples and divorced individuals retirement plans and many people have used them through-out the years to boost their payouts. So what if you’re approaching retirement and had planned on using one of these strategies?   It turns out that some retirees can be grandfathered in and some may have to revisit their retirement strategies for future income planning.

The following compilation of up-to-date social security facts and strategies from around the Web that will help clarify these new rules and help in determining which options, if any, are still open to you so you can make plans accordingly:

If you’re married, there are now 3 sets of rules you need to be aware of when planning for social security.

File and Suspend and Restricted application – who can do it, how it works and what changes.

The File and Suspend rule changes do have certain grandfathering provisions, especially for those nearing age 62 or age 66.  It is thus crucial that you understand the state of your Social Security benefits because immediate action could be required.

With the new changes to social security, you’ll need to do some careful retirement planning, quickly.  Here’s what you should know to use these retirement strategies while you can.

Claiming Social Security is still a strategic decision as the elimination of these two claiming strategies removes some options for couples, but it doesn’t minimize the importance of deciding when to take Social Security.

Advisers say revisions for clients will need to account for income shortfalls as they rethink retirement plans amid Social Security changes.

The benefits of delaying Social Security may be starting to get through to the public, though there is still a long way to go.  So when are People Claiming Social Security ?