Years ago, retirees got by on pensions and Social Security benefits. These days, many tried-and-true retirement options are no longer offered by employers or have nearly dried up, making it critical that you start planning for retirement as soon as possible.
While planning for retirement can be a daunting and time-consuming task, it can also empower you to take a critical look at your finances and plan for the future.
Fortunately, you don’t have to set out on this journey alone. Professional investment teams can guide you through the process of planning for retirement. Plus, retirement planning tools, calculators, and planners can help you take control of your retirement savings.
Understanding retirement planning tools
Retirement planning tools can include online calculators, software, or other programs that help you estimate when you are able to retire comfortably, how much you need to save for an enjoyable life after work, and whether you’re on track for the future you’d like to have.
These tools are largely based on a set of basic personal finance questions, which typically include:
- Current age
- Desired retirement age
- Annual income
- Investment style (on a scale of low risk to high risk)
- Current and future savings and spending estimates
- Expectations for Social Security benefits and other retirement income
- How much money you plan to spend per month or year in retirement
From this information, retirement tools can infer how much you are on track to save by retirement age and whether those savings will sustain you when you’re no longer working. Many tools also employ a Monte Carlo simulator, which manipulates different variables in your plan, such as risk in particular markets in which you’re invested, to see how it will affect your savings and life in retirement.
All retirement calculators and planners are based on estimates, so the output is only as accurate as the input, which is inherently biased and subject to change. While some calculators enable you to account for certain assumptions, such as the rate of increase of your annual salary, life expectancy, and inflation rate, the numbers you provide are only so certain, so retirement calculators and planners should be used with a level of skepticism.
Moreover, traditional retirement planning tools typically only work with savings and interest, and don’t provide advice on how to invest those savings. For this reason, wealthy individuals have historically tapped seasoned financial planners to develop their retirement plans and invest their funds wisely. Today, startups like Titan help you go beyond the retirement calculator—by democratizing access to financial advice and management.
Despite their potential flaws, these tools provide a great baseline for how much money you can, should, and are on track to save and invest for retirement. Many tools vary in price and offerings, so it’s important to do your research and understand which planner or calculator can give you the best results.
The 6 best retirement planning tools
The Charles Schwab Retirement Calculator is a free online tool that helps determine whether your current savings plan aligns with your expectations for life post-retirement. The questionnaire requests basic personal information: your current age; when you plan to retire; your investment style on a scale of low to high risk; your current and future savings and spending estimates; Social Security expectations; and how much money you plan to spend each year in retirement.
With this information, the retirement calculator shows how much savings you will need based on your current lifestyle and desired lifestyle in retirement, whether you need to adjust your plan, and potential ways to get on track. By adjusting your retirement age, how much you’re contributing to your retirement savings each year, and what you’re planning to spend each year in retirement, you can see how different scenarios will affect your savings.
The Fidelity Retirement Score yields a score of how well your retirement savings are progressing, from needing attention to being right on track. The free user-friendly scoring tool also predicts how much in savings it thinks you will need per month in retirement, as well as projected retirement savings.
To use it, you’ll need to provide basic personal information, including your age; annual income; how much you’ve saved for retirement thus far; how much you save for retirement each month; whether you will spend more, less, or the same amount in retirement as you do now; and where your investment style falls on a scale of conservative to aggressive. You can also test out different scenarios by altering your retirement age, monthly savings contributions, standard of living, and investment style on the score page.
Like other retirement calculators, the Personal Capital Retirement Planner runs different scenarios based on your retirement age and savings contributions. Unlike some other calculators, it helps you see how major life expenses, such as buying a house and sending a child off to college, can impact your retirement. With this free online retirement planner, you can add accounts and manually input data to track your habits and strategize how you can improve your chances of a successful retirement.
The Personal Capital planner gets even more granular by applying other sources of income, like Social Security and pensions, to gauge how much you can afford to spend in retirement every month.
With the Stash Retirement Calculator, you answer four simple questions: your age, current income, how much you’ve saved, and your current monthly savings. In addition to showing whether you’re on track for the retirement you want, the free digital tool takes into account other assumptions, such as the rate of increase of your annual salary, life expectancy, and inflation rate. If your retirement plan needs work, the Stash calculator gives actionable tips for how to get on track, like bumping up monthly savings, delaying retirement, or spending less each month in retirement.
The Vanguard Retirement Nest Egg Calculator helps calculate how long your retirement nest egg will last, and provides a long-term projection of how much your investments could grow. Using this free, digital calculator, you will answer a few basic questions, including how many years you anticipate your savings lasting, your current savings balance, how much you expect to spend each year in retirement, and how your savings are allocated. From this, the Nest Egg Calculator can predict whether your savings will last as long as you’d like and your projected savings balance.
For $79.99, the Complete Retirement Planner provides a big-picture glimpse of your savings, from how much you will realistically be able to save before retirement to how that number compares to your needs. This planner ventures beyond basic personal information to itemize expenses based on different time periods, list various income sources (e.g. wages, pensions), specify retirement contributions (e.g. IRAs, 401k), input tax deductions, and estimate health care costs in retirement. With greater flexibility, you can also separate entries by spouse and year for more realistic results.
Investing retirement savings with Titan
Saving for retirement can be overwhelming—and that’s not even taking into account the financial planning, research, and strategy that will help you achieve your goals. By allowing a professional investment team to help with retirement investing and saving, you can free up some of that time and optimize your long-term wealth.