While planning for retirement, a number of factors need to be considered so that you can plan a realistic retirement which will guarantee safe and secure days ahead. Since factoring different things for your retirement can be a complicated procedure, retirement planning calculators are a great tool which assists in finding how much money you should save for your retirement.
The inclusion of factors in a retirement planning calculator: Retirement planning calculators are of different types. They, however, require similar information to come up with the most basic calculations. For starters, you would require the age when you are planning to retire, your current age, gross retirement income, inflation rates, as well as the interest. These figures are known to have an impact on the results. Hence, you should provide accurate details. These calculators will them calculate the portion of your income which you should save for supporting your retirement lifestyle.
Factors influencing the calculation: Some of the more sophisticated calculators will ask different questions related to lifestyle, general health conditions, and family genetics. Other questions will be inclusive of whether you are a smoker or non-smoker as these will have an effect on the life expectancy in comparison to the requirement of medical attention. It is a must to consider these factors to have a rough estimation of how much money you require for living from your retirement income and savings. These factors will have an effect on the amount of money you be required to save presently. It is useful to know these figures as they will aid in taking the right measures toward living a secured life post retirement.
The retirement planning calculator will also aid in calculating the annual rate of return which is expected to be gained from investments or savings.