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Retirement Planning Calculator

Who This Calculator is For: Users trying to determing how much
it will take to retire with enough money to live comfortably.

What This Calculator Does: This calculator computes the amount needed in an investment account to fund
your retirement. It also calculates the monthly savings plan needed to reach this amount of money.
(Withdrawals are assumed to be made at the beginning of each month)

Phase I : Income Required from Investments During Retirement
   Monthly Amount Needed at Start of Retirement (after tax is paid)
   Average Tax Rate During Retirement  (e.g. 22)
  Monthly Amount Needed at Start of Retirement (before tax is paid)
  Less: Other Sources of Income During Retirement  
     Monthly Amount Expected from Social Security
     Monthly Amount Expected from Company Pension
     All Other Sources of Monthly Retirement Income
  Total Income From All Other Sources
  Monthly Income Needed from Investments - 1st Year (before tax is paid)
Phase II : Determine Required Size of Investment Account Balance
  How Many Years do You Expect to Live After Retiring?
  What Rate of Return do You Expect Your Investments to Earn During Retirement? ( e.g. 4.75 )
  What Inflation Rate do You Anticipate During Retirement?  (e.g. 2.5)
Phase III : Monthly Savings Needed to Reach Required Investment Account Balance
  Current Balance in Investment Account (e.g. 125000)
  Number of Years Till Retirement Begins
  What Rate of Return do You Expect Your Investments to Earn Prior to Retirement? (e.g. 7.5)
  Average Tax Rate During Working Years (e.g. 25)
   How Much Can You Increase Your Monthly Savings Each Year?
  How Many Years Can You Continue to Increase Your Savings?
  Monthly Income Needed From Investments - 1st Year (before tax is paid)
  Size of Investment Account Required at Retirement to Generate Income Needed
  First Year's Monthly Savings Deposit Required to Produce Needed Investment Account Target Size


Estimates for rates of return during retirement should generally be more conservative than estimates for rates of return during the accumulation phase. Investors are more willing to take risk while they are still working than they are after they are retired. For example, while working an investor may try to achieve a 7.5% return on his/her investments whereas s/he may be willing to be satisfied with a less risky 4.75% return during retirement. Entries of 15 or less will be treated as a percentage. Entries greater than 15 will be treated as a dollar amount. Inflation erodes your purchasing power. Not all items are affected equally. A fixed-rate mortgage can be used to offset some inflation since it is repaid in "deflated" dollars. Try changing the input to see what effect this has on your investment account and savings requirements. This is the amount of "spendable" income you want during your first year of retirement. This amount will increase by the rate of inflation that you enter below. Your average tax bracket is estimated by dividing the tax you pay by your total income from all sources, whether this income is required to be reported on your tax return or not. The deductions you take on your tax return are not considered in arriving at this number. Your average tax bracket during retirement may be different than your average tax bracket while working.