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About Retirement Calculator, Inc.

CBS The Early Show

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Individual 401k Savings Calculator

A Better Individual 401k Savings Calculator

When you look at most basic individual 401k savings calculators, you're going to see places where you enter very basic information. What's your annual salary? How much of that amount are you contributing? You'll be asked how old you are and at what age you plan to retire, how much you have already saved and how much your employer will contribute as well. All of this information that you enter into an individual 401k savings calculator seems like it should give you at least a reasonably accurate estimate of how your money will grow, right?

To an extent, yes, but seems is the operative word. On that type of an individual 401k savings calculator, there are often a lot of variables that you have to estimate. For example, there is typically a field for you to enter the projected rate of interest on the account - a value that can change over time. You will also have to estimate annual increases in your salary, so the amount that is calculated could change dramatically if you lose your job or change jobs (which will also affect employer contribution amounts). Finally, the calculated amount often is not going to take inflation into consideration.

As a result, using this type of an individual 401k savings calculator is going to give you a sense of how much your savings will grow over time, but it is difficult to tell whether or not that sense will be accurate. Simply put, if you want to be able to take control of your retirement savings, develop an accurate sense of the money that will be available to you when you retire and to determine what you can do to ensure that the money that you need to retire will be ready when you need it, you need a more effective calculator.

The retirement calculator that you can download on this page is a better individual 401k savings calculator. With it, you won't just be able to look at a straightforward amount; instead, you will be able to look at the ways in which small changes that you make will affect your retirement savings. Rather than investing more into your 401k, you will be able to enter the amounts and see whether or not that change would be the most valuable to you or if you would be better off saving with an IRA or to buy into a mutual fund.

By calculating your retirement savings with this calculator, you will also be able to do more than just look at general projected amounts. You will be able to enter specifics about your 401k savings plan, interest rates and look at estimates that factor in inflation and how it will affect the money that is available to you when you retire. More importantly, however, when you download and use our retirement calculator - as an individual 401k savings calculator and to look at other savings strategies - your contact information will be forwarded to a financial advisor in your area.

That financial advisor will give you a chance to calculate your savings and look at a couple of possible alternatives and then be there to answer the questions that you have about whether or not you are saving for retirement in a way that will benefit you. He or she can talk with you about your goals, risks and benefits of certain savings and investment strategies and help you to develop a better strategy and plan for investing in your future.

Why settle for a basic individual 401k savings calculator when you can have so much more?

Find a Qualified Financial Planner in Your Area

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Analysis of the Economics of Early Social Security Withdrawal

Robert J. Phillips
Chief Retirement Consultant

Deciding whether or not to take the early withdrawal of social security at age 62 can be difficult. If you need this income at 62 to fund your retirement the decision is fairly straightforward. Take it early! On the other hand, if you have another source of revenue to fund your retirement your decision will be primarily based on lifestyle, health and investment preferences.

Several factors can affect your decision. First is your life expectancy. If you are in good health and have a family history of living beyond 90 then waiting for full benefits may be best. Two other factors impact this decision. First and most important is the value of money or your expected return from your investments. If you are using other investments instead of social security to fund your retirement you should use the rate of return of these investments as your value of money. There is another way to look at the value of money. If you do not require the social security money to live, you can invest the distributions for the future. The rate of return of this investment is your value of money. If your investments will make larger returns such as stocks this would favor taking the early withdrawal.

The last factor impacting your decision is inflation. Social security includes an annual adjustment based on inflation. You cannot control this variable but you should be aware of its impact. If future inflation is significant it will favor a later full distribution

FREE Social Security Calculator:

We developed a calculator to assist in analyzing the impact of taking early benefits at age 62 or waiting for full benefits at age 66 to 67 depending on the year you were born...If you were born in 1960 or later your full benefits will begin at age 67 and your reduction for early benefits at age 62 will be 30%. If you were born between 1946 and 1960 your full benefits begin as early as age 66. We have included a chart that summarizes information.

To use the calculator you need to input your year of birth. You also need to input a value of money up to 10% and a projected inflation adjustment. The calculator analyzes income generated over time from both the early and full benefit investments. It calculates the age at which full social security will catch up and breakeven with the early withdrawal. If you were born before 1960 your breakeven age will be impacted by the year you were born. An early breakeven age favors waiting for full benefits.

The social security calculator is not the final answer whether to take an early withdrawal but it does give you additional economic data to assist in that decision. Ultimately you must balance income, investments and lifestyle to optimize your enjoyment during your retirement years.