5 Apps and Calculators for Retirement Planning
5 Apps & Calculators for Retirement Planning
Knowledge is power, and this certainly holds true for retirement planning: the process of determining income and lifestyle goals and the actions you must take to achieve those goals. While retirement planning involves much more than finances – such as when you will retire, where you will live and what you will do – most of these factors depend largely on the income you can expect during your retirement years. The more you learn about your retirement options, the better equipped you may be to make effective decisions. Here, we take a look at five apps that can help you plan for retirement.
AARP Retirement Calculator
The AARP Retirement Calculator was developed for single people, married couples and domestic partners who are currently working and planning for retirement. It is intended to provide basic information about the amount of money you'll need to retire when - and how - you want. Users answer questions about household status, age, salary, current retirement savings account, Social Security and lifestyle. The calculator then shows if you are on track for retirement and provides options if you are not. For example, if the calculator indicates you may not have enough money during retirement, it suggests increasing your savings, adjusting your lifestyle in retirement, working longer at your current job and/or working part-time in retirement.
iMaximize Social Security
Platform: Online, iOS, Android
Cost: Free for basic version; $9.99 for additional features
The iMaximize Social Security calculator was developed to help anyone at or nearing retirement age determine the most favorable strategy to maximize Social Security benefits. The app uses a proprietary calculation model to produce results tailored to your individual scenario, considering individual life expectancy, age, personal insurance amount (PIA), marital status and current filing status. Users answer a few questions to receive a Social Security Income Snapshot (free) or 5 detailed reports (with $9.99 purchase) that includes a list of applicable filing strategies, a graph of gross lifetime benefits of the top strategies and the recommended strategy based on the user's particular inputs.
RetirePlan is an iPad app that helps answer your questions about retirement, such as "When can I retire?" and "How much do I need to save every year?" Users can research various scenarios by inputting values for age, retirement age, life expectancy, current savings, average yearly savings, Social Security (age to begin benefits and monthly income) and desired yearly retirement income (in today's dollars). The app has sliders so you can easily change a value to see different outcomes. You can add a spouse, include/remove Social Security, show/hide inflation and interest rates, add a pension, send a child to college, enter large upcoming expenses, and add additional rates of return and retirement income, as well as tax assumptions. Results are compiled on a spreadsheet that can be emailed.
Vanguard Retirement Nest Egg Calculator
Users enter six values: the number of years your portfolio should last, your portfolio's current balance, how much you spend from the portfolio each year, and the percentage your portfolio is invested in stocks, bonds and cash. The Vanguard Retirement Nest Egg Calculator then performs a Monte Carlo simulation using a random sampling of returns from historical data to create a range of projected portfolio balances by year. It also calculates the probability, as a percentage, that your portfolio will survive the number of years specified. For example, you want your portfolio to last 30 years. If you have a balance of $1,000,000 today invested in 20% stocks, 50% bonds and 30% cash, and spend $45,000 each year from your portfolio, the probability that the portfolio will survive 30 years is 73%.
The Military Retirement app is designed for military personnel from all branches of military services. Users enter personal information and the app calculates retirement pay based on rank, length of service, date of retirement, Survivor Benefit Plan (benefit and premium), TRICARE medical insurance (options and premium), disability pay (based on disability rating), Veterans Group Life Insurance (coverage and premium) and federal taxes (based on filing status). Users are shown multiple scenarios to determine what the best retirement option might be.
The Bottom Line
These are but a few of the numerous mobile apps and online calculators that are available to future and near retirees. It's important to remember that no app can predict the future. They can only calculate probabilities based on information that you've entered, including assumptions about future investment returns, inflation, tax rates, spending needs and the number of years you expect to live during retirement. All retirement apps and calculators should be used with caution: Consult them, but make sure you are doing additional homework to plan appropriately for your own retirement.