How Does A Basic Retirement Calculator Work?
Most people are interested in what situation they will be in when they retire. Everyone has an idea of how they would like their life to be. If you input what you are currently putting away for your retirement into a retirement calculator it can tell you what you can expect to have at the time of retirement. This can help you make any needed adjustments to be sure you can have the retirement life you want. This valuable information is at your fingertips. Just surf the internet to find a retirement calculator and start inputting the numbers.
The results from the retirement calculator are always ballpark figures since the calculator is taking current situations and trying to predict where the financial world will be in the future and how that will affect your retirement savings. Since there is no way to perfectly make such predictions the calculator can only guesstimate how your retirement plan will work out.
A basic retirement calculator works in current day dollars. So if you tell it that you want to know how much you will have to save to retire in 20 years and have the equivalent in 20 years of your current $4,000 a month lifestyle then that is what it will tell you.
Most financial consultants use a retirement calculator to stress the need to save as much as possible for your retirement. The calculator compares cost of living expenses now with what they will be in the future, maybe 15 to 20 years down the road, or whenever it is that you will be ready to retire. Those numbers can be a bit overwhelming. But remember it is just a shot in the dark estimate.
When you look at history and the facts you may want to keep your money and live for now.
Can We Predict the Future?
There was a major stock market crash that affected millions of people in the 1920's, the 1970's, the 1980's, and the 2000's. Millions of people lost their life savings and the first generation that tried the "saving for retirement" game lost everything in early 2000. To put the rise of the cost of living in real life terms a new car in 1940 cost between $600 and $700.
In the 40's you could buy a new car for well under $1,000. Now it cost at least 15 times that amount to buy a new car. Things have really changed. The cost of living continues to rise dramatically. Unfortunately, salaries have not followed suit. These are things a retirement calculator may not factor in.
The results from the retirement calculator are always ballpark figures since the calculator is taking current situations and trying to predict where the financial world will be in the future and how that will affect your retirement savings. Since there is no way to perfectly make such predictions the calculator can only guesstimate how your retirement plan will work out.
A basic retirement calculator works in current day dollars. So if you tell it that you want to know how much you will have to save to retire in 20 years and have the equivalent in 20 years of your current $4,000 a month lifestyle then that is what it will tell you.
Most financial consultants use a retirement calculator to stress the need to save as much as possible for your retirement. The calculator compares cost of living expenses now with what they will be in the future, maybe 15 to 20 years down the road, or whenever it is that you will be ready to retire. Those numbers can be a bit overwhelming. But remember it is just a shot in the dark estimate.
When you look at history and the facts you may want to keep your money and live for now.
Can We Predict the Future?
There was a major stock market crash that affected millions of people in the 1920's, the 1970's, the 1980's, and the 2000's. Millions of people lost their life savings and the first generation that tried the "saving for retirement" game lost everything in early 2000. To put the rise of the cost of living in real life terms a new car in 1940 cost between $600 and $700.
In the 40's you could buy a new car for well under $1,000. Now it cost at least 15 times that amount to buy a new car. Things have really changed. The cost of living continues to rise dramatically. Unfortunately, salaries have not followed suit. These are things a retirement calculator may not factor in.
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posted by Credit Counseling at
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