Government Calculator Will Serve In Projecting Your Retirement Savings

To help with retirement preparations, the U.S. government has released an extremely helpful and easy-to-use retirement savings calculator to help you calculate and understand your IRA and other retirement finances. To learn more about it, why it works and where you can get it - keep reading.

Background

The calculator’s accompanying guide is titled “Taking the Mystery out of Retirement Planning.” It was produced by the Department of Labor’s Employee Benefit Security Administration branch. Essentially, the booklet provides a series of scenarios along with several easy-to-follow worksheets that help you calculate how much you need to set aside in long-term savings. The online worksheets are automated.

Where You Can Find It

The guide was previously only published in print format, with eight worksheets. However, it’s now available online with a great retirement savings calculator to help you do the math. Users can even store their information and results for up to a year (with a secure user name and password).

To order a printed copy, you can call 1-866-444-3272 or print it yourself right from the website. You can also access the worksheets and calculators online at dol.gov/ebsa (choose Publications/Reports).

Why It Works

The biggest advantage to using this simple 62-page booklet is how easy it is to use. Whether you’re doing the worksheets with the online calculator or by yourself using a printed copy, it’s easy to understand and follow. The tool is also very diverse and flexible. It lets you input a variety of scenarios, from extra part-time income after you retire to additional costs, like extended health care.

The next feature that makes this online retirement calculator stand out from the competition is its ability to make very complex assumptions. An example of this is how it treats health care inflation. Other retirement calculators simply assume that all expenses will inflate at a rate of about 3.5%, however this calculator knows that healthcare typically rises at about 7%. That potentially major discrepancy is accounted for.

Drawbacks to the Guide

The main drawback for the guide is that it appears to be written for people who are about 10 to 15 years from retirement. The online tools can help and assist recent retirees, but the main focus is on planning and saving in those last few, crucial years.

Another drawback? There’s little planning advice for those who suspect they may need long-term health care or the extra cost of assisted living - a reality for many aging adults.

That said, it’s still a fantastic retirement savings calculator. Overall, it’s a simple tool which is easy to use and yet still very complex. It also has a firm grasp of government regulations. Finally, it’s free so you could hardly ask for anything more.