How'm I doing?
Ed Koch, the buoyant three-term mayor of New York City, used to ask everyone he met, "How'm I doing?" (He even said it to me when we shook hands once on the 4th of July.) These days we're all wondering how we're doing saving for retirement. The answer is probably "not as well as we'd like" after two bear markets and two recessions in less than a decade.
How does anyone figure it out, anyway? There is no magic number, no infallible rule of thumb that that solves the retirement savings equation.Still, we can get some reasonable guideposts online.
There are no shortage of calculators online, but several are really good. This isn't a scientific survey, but here are a couple of calculators I like. But please send in your suggestions and tell us why you favor a particular retirement calculator.
Let's look first at some demanding online programs. These require you to spend the time gathering your financial information, plugging in the data, and playing with various scenarios. These comprehensive programs are actually financial planning blueprints that address more financial iassues than retirement. That's why I like them.
Analyzenow.com. Savings is the core concept for Henry "Bud" Hebeler.
He offers you the option at Analyzenow.com of tapping into some relatively simple free calculators. But he also offers a comprehensive Excel-based pre-and post-retirement planner: (It's $29 to get an emailed password; $59 if you want a disk sent to you.) You can analyze your investments, tax situation, income, Social Security payments, real estate and other key financial numbers.It also runs three separate scenarios for testing your retirement margin of safety: Your own outlook; living through a bad historic period; and the experience of an historically good episode.
**Esplanner.com.** Boston University economics professor Laurence Kotlikoff puts spending at the center of his financial planning programs. The comprehensive program focuses on your lifetime living standard, including retirement. He has a basic free program that's suggestive. The centerpiece programs costs money, ranging between $40 and $199. Make no mistake: The planning guide is dense, time consuming and requires lots of data. The reward: It spews out interesting analysis and suggestions on all kinds of money matters.
firecalc.com Firecalc is an easy-to-use retirement calculator (especially compared to the other two.) It doesn't take much time to fill out, yet it packs in much more information than the typical online calculator. I like the simple philosophy it has for figuring out the adequacy or inadequacy of your retirement strategy: Could your finances hold up during the worst financial episodes in U.S. history, such as the inflationary '70s, the Great Depression of the 1930s, and a number of other calamitous moments since 1871. In other words, what's your downside risk. You can get a fast answer here.
Now, a number of financial services companies like Vanguard, T. Rowe Price, Fidelity, and Charles Schwab have truly good retirement calculators, too. But I decided to focus for this post on calculators that live elsewhere on the web.
The next post on retirement calculators will look at a few of the best quick-and-dirty online programs. These are the web calculators to click on right after getting a quarterly statement on your 401(k) or 403(b). They provide a very quick response to the natural question after reading the statement, how'm I doing?