Online Retirement Calculators: Cautions and Considerations


If you’re looking for an online retirement calculator, it’s a good sign. It means you care enough about your future to be searching for some answers. If you’ve already found a retirement calculator you like, don’t stop there. It can be a good first step, but if you want to create a successful retirement strategy, it can’t be your last.

Most free online tools operate the same way

There's one screen with multiple fields you plug numbers into based on your best guesses for the future. Investment returns, inflation rate, tax rate, monthly spending – there are many variables to consider and assumptions to make.

The biggest pitfall of retirement calculators

They're forced to assume the variables will never change. But we all know returns will go up and down. Inflation will ebb and flow. And there’s a really good chance your monthly living expenses will change at a different rate than your healthcare expenses. Your lifestyle won’t be static over time, and neither will the other factors involved in planning for your retirement.

The challenge we all face in retirement planning

There's a myriad of moving parts. Building a strong plan tailored to your specific situation requires much more than even the best online calculator has to offer. Your goals are unique to you, so you need unique attention to find ways to meet them.

You don’t need to completely avoid retirement calculators

Just use them with care. And with the understanding that your retirement picture is much larger than what can fit on your computer screen. To create a dynamic strategy, seek out experienced retirement advisors who will help you put together a plan that accounts for today, the future, and all the variables between.