Retirement Calculator Introduction

The Charting Your Retirement Calculator provides the most accurate forecast for your lifetime planning. Whether you are 5 years or 30 years away from retirement or even if you don’t plan to retire, the Retirement Calculator presents you with a graphical result of assets between now and the end of your plan as shown below for a 40-year-old couple with two children who planned to retire at 60.

This lucky couple retired in 2038 with over $2.5M (inflation adjusted) and left almost $2M to their estate.  At the beginning of their plan, they had a combined salary of $150K, $500K in savings, $500K in 401K accounts, and $200K in a tax-free account.  Not everyone can be as fortunate as the following chart shows. 

 

 

Their neighbors made the same amount of money and had the same living expenses.  The difference was they started with no money in 401K and tax-free accounts, and they just started contributing 10% of their salary to their 401K.  They had $1.4M when they retired, but they outlived their money.

Sometimes, it may not be enough to use a static growth rate for your investment returns.  Although stock market and bond returns have averaged over 12 and 5% respectively, they can be very random both to the upside and downside.  You could have multiple downside years like 1973-1974 or 2000-2002.  A Monte Carlo report reflects the randomness and provides cumulative probabilities using random returns over the past 67 years.

The Monte Carlo simulation reveals that this couple only has a 40% chance of outlasting their savings.  Starting in the year 2030, the probability started declining quickly.  Nothing could be worse than outliving your savings and having to find a job when you are 70+.  For more information on Monte Carlo simulation, please visit the FAQ.

Not sure when you can retire, let the Retirement Calculator determine the ideal age to retire with a 95% probability as it goes through 1000 iterations for each age up to 65.

The Charting Your Retirement Calculator differentiates itself from other calculators in two ways. First, it uses proprietary algorithms to build retirement models through your lifetime using current IRS and Social Security regulations. Secondly, it incorporates more data into the model than other calculators for more accurate results. For example, most retirement calculators do not provide:

  • Disability Income
  • Recurring and One-time Income and Expenses
  • Multiple Mortgages
  • Installment Debt
  • Distinctions Between Taxfree(ex. Roth IRA) and 401K/IRA Savings
  • Living Expense Adjustments Before and After Retirement
  • Options to Start Social Security Benefits
  • Electing to Downsize (or Upsize) Your Home
  • Ability to Randomize Your Investment Returns Based on a 60+ Year History of the S&P500
  • Monte Carlo Simulations for Probabilistic Outcomes

Also, with most calculators, you reach a point where you need to do some additional research to fill out a required field. Usually, you will be asked about your living expenses. On the Charting Your Retirement main menu, the Resources menu provides both a downloadable spreadsheet and an on-line living expense tool to help you determine your living expenses. There are also tools to help you determine:

  • Rates of Returns For Your Stock/Bond Portfolios
  • Nursing Home Expenses
  • College Costs

Other benefits include:

  • Secure Storage of All Input Data
  • Real-time What-if Analysis
  • All Your Data is Private, Never Shared, Never Sold
  • Free to Use