Retirement Calculator
An employee’s first step in formulating a retirement savings plan is to determine the approximate amount of annual income he or she will need during retirement. Experts predict you will need approximately 65 to 85 percent of your current income in order to maintain your present lifestyle in retirement.¹
Invest n Retire‚ LLC designed a retirement calculator which assists employees in determining how much they need to save annually in order to establish a retirement fund from which they may pay their living expenses throughout their lifetime. Based on the employee’s information‚ (such as retirement age‚ current savings‚ and annual income during retirement) the calculator computes the projected amount (adjusted for inflation) which an employee must accumulate by retirement age.
The calculator also illustrates any deficit and alternative options the employee should consider in order to eliminate the deficit. Employees may run different scenarios using different rates of return‚ contribution rates‚ retirement ages‚ and annual income need during retirement. Taking into account all of the variables‚ the software illustrates the asset allocation model which targets the rate of return the employee indicates he or she desires to earn‚ keeping in mind the ultimate goal.
Expenses after Retirement
When an individual retires some expenses may drop‚ such as work related expenses and paying into social security‚ while other expenses may go up because of new found freedom to travel or rediscover old hobbies. During the middle retirement years‚ expenses may drop as retirees travel less and in the later years‚ income needs are largely determined by health care costs.²