A lot of people, whether younger or older, are anxious about retirement because of the various proposals to change Social Security and because of the number of businesses and governmental entities that are curtailing retiree benefits and eliminating pensions. With these uncertainties, it makes sense to take advantage of any retirement accumulation programs each of us can manage, and to plan for the future. The AARP has a Retirement Calculator that I found to be easy to use. Included is a tool that allows you to make changes to your assumptions and plans to see how they will affect your income in retirement. For example, the amount of a likely shortfall is adjusted if you elect to retire later, work part time in retirement, put aside a larger proportion of your current salary, or reduce your lifestyle in retirement.
The Social Security Administration has a Retirement Estimator that will work for many individuals. It assumes that you already have enough work credits to qualify for benefits and that certain other conditions do not pertain, such as already collecting Social Security benefits. You have to enter identifying information, then you can see what your monthly benefit will be depending on the age that you choose to retire. The same page has links to other calculators, but they are not derived from your earnings record, as the Retirement Estimator is. There’s also a link to a document that discusses when to start taking your benefits.
Bankrate, an aggregator and publisher of bank rate information, has made a number of calculators available that allow a person to compare their retirement prospects depending on the retirement instrument he or she uses, such as traditional IRA, Roth IRA, 401(k), 403(b), or annuities.
It may be scary to see what would be needed to have a comfortable retirement, but I think it’s better to know what one’s prospects are rather than be painfully surprised when it’s too late to do anything about it. Sue Sweeney, Chair, Gerontology Department, Madonna University