401k Calculator: 401k Retirement savings and Social Security Calculator
Advice Corner
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If you haven’t, the government is trying to track you down.
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Some interesting Social Security Facts and statistics that would amaze you.
While you may think Full Retirement Age is 65, depending upon you date of birth it can be as high as 67.
Factors every retiree should consider when choosong a Place to Retire
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To manage and improve your credit standing, Credit Card Management offers helpful advice for improving your credit score.
Advice for consumers who fall victim to Identity Theft
Tips and advice for Protecting Against Credit Card Fraud
HOW TO SAVE FOR RETIREMENT
1. Start now; don't wait. Time is critical.
2. Start small, if necessary. Money may be tight today, but even small amounts can make a big difference over the long haul, the right kind of investments, and tax-favored vehicles such as 401k, company retirement plans and IRAs.
3. Whenever possible, use automatic deductions from your payroll or your checking account to deposit directly into mutual funds,
401k, IRAs
, or other investment vehicles.
4. Save regularly and consistently. Make saving for retirement, especially to a 401k, a habit. See what it takes to save a million dollars.
5. Be realistic about your 401k, retirement and investment returns. Never assume that a year or two of high market returns will continue indefinitely. See how our Social Security Calculator can help you plan for retirement
6. Always roll over 401k retirement account money if you change jobs.
7. Avoid dipping into your retirement savings, especially your 401k, unless for dire emergencies.
401k Retirement Savings Calculator
401k Retirement calculator:
A 401k can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all 401k contributions and earnings to your 401k are tax deferred. You only pay taxes on contributions and earnings when the money is withdrawn from your 401k. Second, many employers provide matching contributions to your 401k account which can range from 0% to 100% of your 401k contributions. The combined result is a
retirement savings plan
you cannot afford to pass up. The 401k calculator shows you how much money you can potentially save in taxes by participating in a 401k.
401k Retirement Savings Calculator - Definitions
401k Retirement Calculator:
A 401k is a retirement savings plan that is funded by employee contributions and, often, matching contributions from the employer. The major benefit of a 401k plan is that the contributions, usually made through payroll deductions, are exempt from federal income tax, and your investment grows tax-free until withdrawn. Often, 401k plans are self-directed, and employees are permitted to take these funds when they leave their employer. When you eventually begin to make 401k withdrawals — you can start once you reach age 59 1/2 — you will be required to pay taxes, but at that point you may be in a lower tax bracket.
Annual salary - This is your annual salary from your employer before taxes and other benefit deductions. Since your 401k contribution and company match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.
Percent to contribute - This is the percentage of your annual salary you contribute to your 401k plan each year. Most employers permit employees to contribute up to 15 percent of their salary to a 401k.
Annual 401k contribution limits - Your total 401k contribution for one year is based on your annual salary times the percent you contribute. However, your annual 401k contribution is also subject to certain maximum total 401k contributions per year. The 401k annual maximum for 2008 is $15,500. Starting at age 50 or older, a "catch-up" provision allows you to contribute an additional $5,000 into your 401k account. It is also important to note that employer 401k contributions do not affect an employee's maximum annual 401k contribution limit.
Current age - Your current age.
Age of retirement - Age you wish to retire. This 401k calculator assumes that the year you retire, you do not make any contributions to your 401k. So if you retire at age 65, your last 401k contribution happened when you were actually 64.
Current 401k balance -
The starting balance or current amount you have invested or saved in your 401k.
Annual rate of return - The annual rate of return for your 401k account. This 401k calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2007, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.4% per year
Annual salary increase - The annual rate you expect your salary to increase. We assume that your salary will continue to increase at this rate until you retire.
Employer match - An employer match is in addition to your annual 401k contributions.
For example, let's assume the employer matches 50% of the employee's 401k contributions up to 6% of their salary. The employee earns $100,000 per year and contributes 10%. The results would be:
- $10,000 from the employee
- $3,000 from the employer (which is 50% of $6,000 or 6% of the annual salary).
- Total: $13,000
Employer maximum 401k match - This is the maximum percent of your salary matched by your employer regardless of the amount you decide to contribute to a 401k. For example, let's assume your employer has a 50% match, up to a maximum of 6% of your annual salary. If you have an annual salary of $25,000 and contribute 6%, your annual 401k contribution is $1500. With a 50% match, your employer will add another $750 to your 401k account. If you increase your 401k contribution to 10%, your annual contribution is $2500 per year. Your employer match, however, is limited to the first 6% of your salary and remains at $750.
FINANCIAL CRISIS
The U.S. financial and credit crisis led to the dramatic failures of such U.S. financial institutions as Lehman Bros, Bear Stearns, Merrill Lynch, AIG, Washington Mutual, and the government take over of Fannie Mae and Freddie Mac. Find out what caused this financial and credit crisis that may lead the country into a recession or worse. This financial and credit crisis has caused a dramatic rise in bank failures.
401k and Retirement Savings References:
Social Security Official Website: Social Security Online
WiserSomen.org: Retirement Guide for Women
FinAid.org: Student Guide to Financial Aid
Users wishing to make informed personal finance decisions can take advantage of the many finance calculator, including auto finance calculator (car financing calculator), CD calculator, line of credit calculator, and insurance calculator. Additionally, business users can use the commercial loan calculator, or any of the many calculators financial or mortgage loan calculator available on CalculatorPlus.