Online Financial Calculators


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • The Ballpark E$timate is an easy-to-use, two-page worksheet that helps you quickly identify approximately how much you need to save to fund a comfortable retirement. The Ballpark E$timate takes complicated issues like projected Social Security benefits and earnings assumptions on savings, and turns them into language and mathematics that are easy to understand.
  • Online Financial Calculators

    1. 1. Planning for Retirement Using Online Calculators Presented by Danielle Walker and Dr. Jean Lown
    2. 2. Objectives <ul><li>Be able to: </li></ul><ul><ul><li>Use the Ballpark Estimate to figure retirement investing amounts needed </li></ul></ul><ul><ul><li>Explore other online calculators </li></ul></ul><ul><ul><li>Explain why you should recalculate yearly </li></ul></ul><ul><ul><li>Explain why different calculators produce different results </li></ul></ul>
    3. 3. Online Retirement Calculators <ul><li>Purpose </li></ul><ul><ul><li>Give an ESTIMATE of what you will need to invest for retirement </li></ul></ul><ul><ul><li>Or see if your current investments will last your retirement </li></ul></ul><ul><ul><ul><li>Don’t forget about Social Security! </li></ul></ul></ul>
    4. 4. Ballpark E$timate <ul><li>Website </li></ul><ul><ul><li> </li></ul></ul>
    5. 5. What is the Ballpark E$timate? <ul><li>An easy-to-use two-page worksheet </li></ul><ul><li>Helps you quickly identify approximately how much you need to invest for a comfortable retirement. </li></ul>
    6. 6. How to use the Ballpark E$timate <ul><li>Interactive (on-line) </li></ul><ul><ul><ul><li>All of the calculations are done for you </li></ul></ul></ul><ul><ul><ul><li>You just enter the numbers </li></ul></ul></ul><ul><ul><ul><li>Need to be on-line </li></ul></ul></ul><ul><li>Non-interactive </li></ul><ul><ul><ul><li>print the sheets from the web site </li></ul></ul></ul><ul><ul><ul><li>fill in data & do the calculations on your own. </li></ul></ul></ul>
    7. 7. Data Needed for the Ballpark E$timate <ul><li>Current income </li></ul><ul><li>Age & expected longevity </li></ul><ul><ul><li>Planning for a Secure Retirement module 1 </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>Planned retirement age </li></ul><ul><li>Percent of income to replace in retirement </li></ul><ul><li>Health care in retirement </li></ul><ul><li>Amount of pension </li></ul><ul><ul><li>Contact HR office </li></ul></ul><ul><li>401(k), IRA balances </li></ul><ul><li>Estimated Social Security benefits </li></ul><ul><ul><li>From annual statement </li></ul></ul><ul><li>Other retirement income </li></ul><ul><ul><li>Work? </li></ul></ul><ul><ul><li>Rental income? </li></ul></ul>
    8. 8. Social Security <ul><li>Annual S.S. statement (via mail) </li></ul><ul><li>Full Retirement Age (FRA) no longer 65! </li></ul><ul><ul><li>persons born 1943-54: 66 years </li></ul></ul><ul><ul><li>1955-1959: 66 + 2, 4, 6, 8, or 10 months </li></ul></ul><ul><ul><li>persons born 1960 & later: 67 years </li></ul></ul><ul><li>62 is earliest age for SS retirement </li></ul><ul><li>Benefits are permanently reduced for early retirement </li></ul>
    9. 9. Decisions… <ul><li>Percent of income to be replaced </li></ul><ul><ul><li>How much of your current annual income will you need in retirement? </li></ul></ul><ul><ul><ul><li>70% or higher </li></ul></ul></ul><ul><ul><ul><li>living on a lot less in retirement isn’t what most people want </li></ul></ul></ul><ul><ul><ul><li>Health & long term care costs are the BIG unknown </li></ul></ul></ul>
    10. 10. More Decisions… <ul><li>How long are you likely to live? </li></ul><ul><ul><li>Based on family history and health how long do you expect to live? </li></ul></ul><ul><ul><li>Web-based longevity calculators </li></ul></ul><ul><ul><ul><li>Planning for a Secure Retirement </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul>
    11. 11. Tips for Couples <ul><li>Each spouse should fill out own worksheet </li></ul><ul><ul><li>Divide joint assets </li></ul></ul><ul><ul><ul><li>each $ resource can be used only once </li></ul></ul></ul><ul><ul><li>If one spouse’s SS benefit is less than 50% of other spouse’s; increase the lower annual benefit to 50% of higher earning spouse’s </li></ul></ul><ul><ul><ul><li>If John $12,000; Mary $4,000 </li></ul></ul></ul><ul><ul><ul><ul><li>Increase Mary’s benefit to $6,000 (50% of spouse’s) </li></ul></ul></ul></ul>
    12. 12. What % of Income? <ul><li>When determining your goal, you need to think about the type of retirement lifestyle you would like. </li></ul><ul><ul><li>Do you want the cruise-of-the-month retirement or are you planning to spend your time in the garden? </li></ul></ul><ul><li>Plan on health care (LTC) costing far more than you can imagine! </li></ul><ul><ul><li>$200,000 for a couple aged 65 </li></ul></ul>
    13. 13. Planning Jane’s Retirement <ul><li> / </li></ul>
    14. 14. Ballpark E$timate <ul><li>Note the title: a rough estimate </li></ul><ul><ul><li>Re-calculate each year </li></ul></ul><ul><ul><li>Individuals less than 10 years to retirement need more than an estimate. </li></ul></ul><ul><ul><ul><li>need a comprehensive plan based on their individual situation </li></ul></ul></ul>
    15. 15. FINRA <ul><li>Has specific instructions for each category </li></ul><ul><li>‘ Other Income’ category is a little confusing - supposed to include Social Security </li></ul><ul><li>Makes some assumptions but overall pretty helpful </li></ul>
    16. 16. Info needed for FINRA <ul><li>Current Savings Balance </li></ul><ul><li>Annual Retirement Income </li></ul><ul><li>Annual Yield </li></ul><ul><li>Other Income </li></ul><ul><li>Inflation Rate </li></ul><ul><li>Current Age </li></ul><ul><li>Current Tax Rate </li></ul><ul><li>Retirement Age </li></ul><ul><li>Retirement Tax Rate </li></ul><ul><li>Withdraw Until Age </li></ul><ul><li>Inflate Contributions </li></ul><ul><li>Are Annual Contributions Tax Sheltered </li></ul>
    17. 17. FINRA <ul><li>Website </li></ul><ul><ul><li> </li></ul></ul>
    18. 18. <ul><li>Very detailed </li></ul><ul><li>Can add other fields for even more accuracy </li></ul><ul><li>Can calculate for you and your spouse at the same time </li></ul><ul><li>Results very specific </li></ul><ul><li>Results are shown in graph form and contain the probability you will reach your goals </li></ul>
    19. 19. Info for <ul><li>Current Age </li></ul><ul><li>Desired Retirement Age </li></ul><ul><li>Life Expectancy </li></ul><ul><li>Current Income </li></ul><ul><li>Typical Annual Raise </li></ul><ul><li>Desired Annual Income in Retirement </li></ul><ul><li>Expected Benefits </li></ul><ul><li>Age Benefits will begin </li></ul><ul><li>Survivor Benefits </li></ul><ul><li>Savings info for 401k, IRA, or other retirement accounts </li></ul><ul><li>Your portfolio volatility </li></ul>
    20. 20. <ul><li>Website </li></ul><ul><ul><li> </li></ul></ul>
    21. 21. TRowe Price <ul><li>Very helpful </li></ul><ul><li>Tells how much you will need to save every month to reach your goal </li></ul><ul><li>Does not include Social Security </li></ul><ul><li>Less info than other calculators </li></ul>
    22. 22. Info for TRowe Price <ul><li>Current Salary </li></ul><ul><li>Tax Rate </li></ul><ul><li>Inflation Rate </li></ul><ul><li>Number of years until retirement </li></ul><ul><li>Number of years living in retirement </li></ul><ul><li>% of Salary you want in retirement </li></ul><ul><li>Pretax rate of return in retirement </li></ul><ul><li>Current investments in taxable accounts </li></ul><ul><li>Pretax rate of return on taxable accounts </li></ul><ul><li>Current assets in tax-deferred accounts </li></ul><ul><li>Rate of return on tax-deferred accounts </li></ul>
    23. 23. TROWE Price <ul><li>Website </li></ul><ul><ul><li>,0,htmlid=902,00.html?scn=T._Rowe_Price_Calcul&rfpgid=8278 </li></ul></ul>
    24. 24. <ul><li>This is for people who want to see if what they are doing is going to last their whole retirement </li></ul><ul><li>Very good instructions </li></ul><ul><li>Annoying Audio - can be turned off </li></ul><ul><li>Gives suggestions </li></ul>
    25. 25. Info for <ul><li>First name </li></ul><ul><li>Age </li></ul><ul><li>Retirement Age </li></ul><ul><li>Current Annual household income </li></ul><ul><li>Current Retirement Savings </li></ul><ul><li>Retirement Savings each month </li></ul><ul><li>Annual income desired in retirement </li></ul><ul><li>Do you own a home? </li></ul><ul><li>Social Security </li></ul>
    26. 26. <ul><li>Website </li></ul><ul><ul><li> </li></ul></ul>
    27. 27. More detailed on-line calculators <ul><li>Monte Carlo simulation estimates a range of likelihoods of outliving your resources </li></ul><ul><ul><li> </li></ul></ul><ul><li> </li></ul><ul><li>Mutual fund companies </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>Personal finance magazine websites </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>
    28. 28. What if you get conflicting results? <ul><li>Conflicting results are expected! </li></ul><ul><ul><li>Due to </li></ul></ul><ul><ul><ul><li>different assumptions (inflation, rate of return </li></ul></ul></ul><ul><ul><ul><li>level of detail </li></ul></ul></ul><ul><ul><ul><li>Is SS included or not </li></ul></ul></ul><ul><ul><ul><li>Longer time to retirement- more uncertainty </li></ul></ul></ul><ul><ul><li>Complete multiple calculators </li></ul></ul>
    29. 29. Planning for a Secure Retirement <ul><li>On-line course to help you plan your retirement </li></ul><ul><ul><li> </li></ul></ul>
    30. 30. Questions?
    31. 31. FPW - May!! <ul><li>Best Mutual Funds for your IRA!! </li></ul><ul><li>FIRST Wednesday - May 7th </li></ul><ul><li>Remember to bring a friend and get a prize! </li></ul>