According to a recent survey, fewer than half of workers have tried to calculate how much they need to save for a comfortable retirement, and nearly 40 percent simply guess.
Yet, taking a few minutes to analyze your retirement savings progress is essential in understanding how close (or how far) you are from hitting your retirement goals. Better still, plenty of online calculators make an analysis fast and easy.
Experts recommend using calculators that require you to plug in information on how much you’ve already saved, your current contribution rate, and the level of your current income that you’ll need to replace in retirement. Look for tools that predict future retirement security based on the level of income you’ll need to draw in retirement instead of a lump sum.
Framing outcomes in terms of income can give you a clearer picture of where you stand as well as the steps you can take to improve your retirement outlook. Not where you should be? With the retirement calculator, you can see how your progress would change if you adjust your level of savings or alter your investment mix, for example.
Of course, tools like this only make predictions based on current circumstances, and factors can change over the course of a long career. Experts say it’s best to use calculators on a regular basis to make sure things like a market dive or a job loss don’t knock you too far off track. With regular monitoring, you can make the adjustments necessary to ensure a secure retirement.