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Intro to JLP’s Retirement Calculator and Instructions
By JLP | June 20, 2006
I have been working the last couple of days on another calculator. This time it is a retirement calculator. Overall I’m pretty pleased with the final result, which you can see here:
However, BEFORE you visit the calculator, I want to share with you some instructions.
1. This calculator is meant only to serve as an APPROXIMATION and a beginning point for your retirement planning.
2. This calculator DOES NOT account for Social Security income.
3. This calculator asks for the percentage of your current income that you want to replace during retirement.
4. This calculator assumes that retirement income will increase each year at the expected inflation rate. If you enter 0 in that cell, the retirement income will stay the same each year throughout retirement.
The rest should be pretty much straight-forward. If you have any questions or think you have found a bug in the calculations, please email me using the email address in the upper left-hand corner of the blog.
Topics: Calculators, Retirement Planning |
June 20th, 2006 at 2:04 pm
Wow, I’m on a real good track! (Provided your out-of-the-box assumptions for inflation and return bear out…)
June 20th, 2006 at 2:10 pm
Hey JLP,
The calc is great, except that there is no facility to put yearly contributions that I do.. 8k for roth and maxed 401k.
thanks
June 20th, 2006 at 2:14 pm
Pad,
I thought about putting that in but decided against it since the output tells you how much you need to add on a lump sum, annual, and monthly basis, which you can compare against what you are currently contributing.
June 21st, 2006 at 12:58 am
Is the expected ROA the expected real return, or does it not take inflation into account?
June 21st, 2006 at 1:41 pm
Wow, according to your calculations, I’m not in such bad shape! I thought I was way behind. Thanks for that!
June 24th, 2006 at 12:49 pm
Hi, I’m in search of a rate of return calculator and it seems you may be able to offer some help. There used to be one on CNN-Money that allowed you to input a starting balance, a list of additional payments during the period, with dates, and an ending balance. The calculator then generated the rate of return you’ve earned. This was great for my accounts that didn’t spit out that info on the statements, but now it’s gone! Replaced by some simple home rate-of-return page.
http://cgi.money.cnn.com/tools/returnrate/returnrate.jsp
I’m surprised I can’t find anything like it to determine returns. Although there are an endless supply of forcasting models.
P.S. In Canada, the government itself runs my favorite retirement planning calculator. It includes old age security, CPP, pensions, RRSP and other income options to spit out retirement income options.
https://srv260.hrdc-drhc.gc.ca/English-App/INT_01.asp
Thanks.
August 3rd, 2007 at 7:35 am
James,
Try the Excel function XIRR. Just be sure the ending balance is a negative number. I use it and works great for me.
Keith
August 4th, 2008 at 4:00 pm
According to this (too) I have already landed. I tend to favor an income generating portfolio rather than liquidation of a total return portfolio. I wish firecalc had an option like that.
Anyways one option to add would be the possibility of adding sporadic income during one’s retirement years. A few hundred here and a few hundred there can make quite a difference depending on how tight the budget is.