Nest Egg Calculator: Determine How much It Takes to Create a Secure Retirement
Retirement Nest Egg Calculator
Retirement Savings - Nest Egg:
Do you know how much it takes to create a secure retirement?
With a consistent strategy to save, participation in retirement savings plans (e.g., your employer’s 401k, or a personal IRA), strict management of personal debt, and home ownership, you can create a nest egg for a secure retirement. Use this calculator to help determine what size your
retirement nest egg
should be.
Retirement Nest Egg - Definitions
Retirement Nest Egg
Current age - Your current age.
Age of retirement - Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your retirement savings. So if you retire at age 65, your last contribution happened when you were actually age 64. This calculator also assumes that you make your entire contribution at the end of each year.
Household income - Your total household income. If you are married, this should include your spouse's income.
Current retirement savings - Total amount that you currently have saved toward your retirement. Include all sources of retirement savings such as 401(k)s, IRAs and Annuities.
Rate of return before retirement - This is the annual rate of return you expect from your investments after taxes. 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.
It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility.
Rate of return during retirement - This is the annual rate of return you expect from your investments during retirement, after taxes. It is often lower than the return earned before retirement due to more conservative investment choices to help insure a steady flow of income.
Years of retirement income - Total number of years you expect to use your retirement income.
Percent of income at retirement - The percent of your working year's household income you think you will need to have in retirement. This amount is based on your income earned during the last year you will work. You can change this amount to be as low as 80% and as high as 120%.
Expected salary increase - Annual percent increase you expect in your household income.
Expected rate of inflation - What you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI), which has a long-term average of 3.1% annually, from 1925 through 2007. The CPI for 2007 was 2.4%, as reported by the Federal Reserve.
If you are married checkbox - Check this box if you are married. Married couples have a higher maximum social security benefit than single wage earners.
To include Social Security checkbox - Check this box if you wish to include social security benefits in your retirement planning. Social Security is based on a sliding scale depending on your income, how long you work and at what age you retire. Social Security benefits automatically increases each year based on increases in the Consumer Price Index. Including a spouse increases your Social Security benefits by 1.5 times your individual estimated benefit. Please note that this calculator assumes that you have only one working spouse.
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.