Ask Money

Retirement savings calculators

Chris Farrell Jul 1, 2011

Question: I have used some of the offerings of online retirement calculators available on the internet, and although I have gotten favorable estimates of projected income or nest egg size. No two of the calculators actually give me the same answer. I am sure this is due to different methods and different underlying assumptions. I was wondering if there was any way I could get an idea (ratings recommendations) as to which of the calculators I could put more confidence in. I have used the following: Ballpark Estimator, T. Rowe Price’s RIC, offerings from Dinkeytown.net, Financial Engines, CNN Money, Kiplinger’s, and a new one at guidedchoicenow.org. Any insight you could offer as to precautions and pitfalls would be appreciated. Paul, Brookhaven, MS

Answer: How does anyone figure if they’re saving enough for old age? The short answer is you can’t know. There is no magic number, no infallible rule of thumb that that solves the “how am I doing when it comes to saving for retirement” equation. That said, it’s good to have an idea of how you’re doing.

We’ve done a number of reviews on our Makin’ Money blog into online calculators, including retirement programs.

Most of the calculators you mentioned give you a quick fix at best. You don’t need to gather lots of information for these calculators. Ballpark assumptions will do just fine.
I would divide the calculators into two categories. The first (and better) calculators require you to spend time gathering your financial information, plugging in the data, and playing with various scenarios. These comprehensive programs are really financial planning blueprints that address more than retirement (which is why I like them). The main ones are Analyzenow.com, Esplaner.com, and Firecal.com. The review is here.

The price of convenience is that these calculators offer at most a rule-of-thumb bit of information. You can learn more about calculators like this here.

I’d like to know what calculators other people like–and why?

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