Preparing financially for retirement takes diligent tracking of savings, investments and benefit projections over decades. Thankfully, the right tools exist to help chart progress toward various retirement goals. Many of these tools are available for low cost or no cost. Free tools and calculators from companies like SmartAsset, JPMorgan, Schwab and Fidelity offer good examples. These can project key retirement metrics to see how well reality matches up with projections. Schedule a consultation with a financial advisor to get in-person expert help with your retirement plan.
How Tools Can Help Retirement Planning
Retirement is a long way off when you are just beginning your career, and a lot of things can happen between those two dates. Retirement planning tools like calculators and software shine a light on that journey. They can help you track progress on savings goals, simulate different scenarios and provide personalized projections.
As one example, planning tools can illustrate how increasing monthly savings or delaying retirement could boost income. Tools also estimate future benefits from Social Security, employer pensions and other sources. This helps someone craft a withdrawal strategy that won’t prematurely drain savings.
While you can get a lot of benefit from retirement planning tools, these aides have some limitations. For instance, they can make only broad projections and don’t have any way to analyze your complete financial picture. They don’t account adequately for inevitable market fluctuations. They can address only a limited spectrum of the personal variations that may characterize your financial situation. Tools can complement expert advice, but they can’t completely replace it for most retirement savers.
Here are six tools that could help you plan your retirement:
- SmartAsset’s Retirement Calculator. SmartAsset offers a free, easy-to-use retirement calculator to estimate savings needs. Users input details like current age, income, savings rate and planned retirement age. The tool then projects retirement savings and annual income at the planned retirement age. It compares this income to the amount needed to maintain your lifestyle. If there’s a shortfall, it suggests how increasing savings could help reach the goal.
- JP Morgan’s SmartRetirement Illustrator. Those investing in JPMorgan SmartRetirement target-date funds can use the SmartRetirement Illustrator. It generates an estimated safe withdrawal amount each year up until the target maturity year. This helps retirees effectively spend down their balance over an extended time period. However, it doesn’t account for RMDs or personal factors.
- SmartAsset’s 401(k) Calculator. SmartAsset’s 401(k) Calculator projects the future value of 401(k) savings based on regular contributions. Users enter their current balance, annual additions and expected return. It estimates the account value at a future retirement date and the potential annual retirement income. This helps savers see if they need to increase contributions to meet income goals.
- Charles Schwab Retirement Calculator. Charles Schwab offers a straightforward, free calculator to see if retirement savings are on track. Users enter details like age, income, current savings, monthly additions and planned retirement spending. It then compares projected savings to the amount needed at retirement. Changing variables like retirement age and savings rate shows their impact.
- SmartAsset’s Social Security Calculator. Social Security benefits make up a significant portion of retirement income for many. SmartAsset’s free Social Security Calculator helps estimate future benefits based on your age and past earnings. See how claiming age affects monthly and lifetime benefits. It also shows how COLAs protect benefits from inflation over time.
- Fidelity Retirement Score. Fidelity’s free Retirement Score tool quickly assesses your situation in six questions. It asks for your age, income, savings, monthly additions, desired retirement lifestyle and investing style. It generates a score to summarize how your strategy measures up. Adjusting inputs like retirement age and savings changes the score, illustrating their impact. However, it lacks in-depth projections.
Planning Tool Limitations
While very helpful for visualizing scenarios, most retirement planning tools have limitations. They provide only general projections and lack nuanced analysis of your full financial picture. Some require costly upgrades for additional features. Costs, market uncertainty and the range of possible personal situations also constrain usefulness.
Some tools are restricted to certain savers. For instance, JPMorgan’s SmartRetirement Illustrator is only for investors in its target date funds. Others, such as Fidelity’s Retirement Score, may sacrifice too much detail for simplicity and easy of use. Because of these limits, for many retirement savers tools can’t completely replace expert financial advice.
Online calculators and software enable DIY retirement planning by projecting savings and income. They illustrate how adjustments could improve outcomes. They can tell you whether you’re saving enough or pursuing an appropriate investment strategy, or whether some changes could be made to help you achieve your financial objectives. While helpful for tracking progress, tools have limitations versus customized strategies. So there is still a role for qualified human financial advisors.
Retirement Investing Tips
- If you need help developing a retirement plan, consider talking to a financial advisor about how to incorporate retirement planning tools. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- SmartAsset’s Investment Return and Growth Calculator tells you how your portfolio will increase in value over time.
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