Although we know the importance of planning for retirement, most of us tune it out.
The Retirement Confidence Survey by the Employee Benefit Research Institute, found that more than half of boomers “haven’t even tried to figure out how much money they’ll need to save to live comfortably in retirement.” Even those who have planned for retirement have done inadequate planning or based their planning on faulty assumptions.
People may delay planning for retirement because the task seems so daunting, though, tabulating the amount you need to save can be easy with some online financial planning tools.
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Having an idea of the amount you need to save is the first step to planning for retirement, and as the Employee Confidence Survey, found, online financial planning tools can be tremendously helpful.
Here are some of the most useful tools that can help you understand and take control of your finances:
The Retirement Calculator by AARP is an exceptional way to begin the process of reassessing your retirement. By entering basic information about yourself such as your age, current savings, expected retirement age, income and marital status, you can determine whether your savings are adequate or not.
It’s wise to take advantage of 401k plans provided by your employer, especially when your contributions are matched on even a limited basis. AARP’s 401k Savings Calculator tool can help you figure out how much saving your 401k can generate.
The U.S. Department of Labor’s Lifetime Income Calculator is similar to the tools above, but a few of its features make it unique. It allows you to “estimate monthly lifetime income streams based on both the participant’s current account balance and on the projected value of the account balance at retirement. For both balances, the calculator develops two level lifetime payments: one for the life of the participant (with no benefits to any survivors) and the second for the joint lives of the participant and the spouse with a 50% survivor’s benefit for the spouse’s lifetime.”
While the AARP retirement calculator mentioned above factors in your projected social security income, you can use this Social Security Quick Calculator to learn more about what to expect in terms of Social Security income depending on when you retire.
Of course the need for long-term care is unpredictable, but you may want to see what long-term care costs where you live and compare it to the costs of living in an apartment or single-family house using our Cost of Senior Care Calculator.
The Great Recession forced many middle-aged people to return to school for further job training, and so today people of all ages have student loan debt. The U.S. Department of Education’s Federal Student Aid Repayment Calculator will show you what to expect in term of any student loan repayments.
If you are raising children or expect to be in the near future, the Cost of Raising a Child Calculator by the U.S. Department of Agriculture Center for Nutrition Policy Promotion can help you estimate the costs of that responsibility.
Saddled with credit card debt? The Federal Reserve shows you how long it will take to pay off that debt, which depends on your payments and the credit card’s interest rate. For example, someone with $5,000 in credit card debt on a card with 14% annual interest will take 22 years to pay off the card if they make the $100 minimum payment and make no more charges.
If you’re interested in using life insurance to make sure your loved ones are financially secure in case something happens to you, the Life Insurance Needs Calculator helps you determine how much coverage you ought to have.
While it may seem a bit morbid to some, a rational person who is doing financial planning will want to know his or her expected lifespan. The Life Expectancy Calculator by Dr. Dean Foster of University of Pennsylvania’s department of statistics is among the most useful and in-depth. After answering a series of questions, Dr. Foster’s calculator indicated my own life expectancy is 83.11 years. If Dr. Foster’s tool has too many questions for your taste, the Social Security Administration Life Expectancy Calculator is a good alternative with less questions.
If a mortgage is part of your financial equation, or you’re considering obtaining a new mortgage, The Mortgage Calculator tool could be quite useful.
The Health Care Calculator by the University of Berkeley, is designed to show you how much your health care costs will change, if at all, when the Affordable Care Act is put into full effect next year.
Transportation can be a big part of your budget, especially if you’re a commuter. The Commute Cost Calculator by the nonprofit Commute Info can help you put a figure to your travel and help you budget better.
To end on a lighter note, no financial planning would be complete without factoring in your coffee habit. The Coffee Budget Calculator shows you your coffee expenses, based on your coffee consumption, where you buy your coffee, or whether your brew your own.
Do you have advice about budgeting, financial planning or saving for retirement? Share your thoughts and tools with us in the comments below.