What’s so important about retirement calculators? Why are these tools of more than just technical interest? Well, they’re important because either you, or a financial planner, will use the results from a retirement calculator to make one of the most crucial decisions of your life: Are you financially independent yet, or not?
If you get this decision right, you can enjoy more of the freedom and fulfillment that everybody wants out of a complete human life. But, if you get this decision wrong, you could run out of money for healthcare or other essentials in your old age, or you could waste years of your life doing unnecessary or unenjoyable work.
That’s why retirement calculators are important. And it’s why the review I wrote of the three best free retirement calculators, and a follow-up comparison of five free retirement calculators, have been the most popular posts on this site. Thousands of people have read these articles and, I hope, been motivated to analyze and better understand their own retirement trajectories.
A Curated List
But the universe of retirement planning tools has not stood still since I wrote those initial articles. And, I’ve continued to read, and experiment, and hear from readers. So I’ve since cataloged dozens of additional retirement calculators — every general-purpose, publicly-available tool that I hear about. Altogether, I have a database of information on 56, 79, now 82 retirement and financial modeling tools!
Unfortunately, it just isn’t realistic for me to perform in-depth reviews on that many software programs. Yet retirement calculators are a core topic of this blog, and I know many people come here for guidance about them. So, how should I go about evaluating all of these options?
Here is my solution: Rather than attempt to compare or validate so many calculators in-depth, I’m offering a “curated” list below of what I consider to be the best available calculators, along with key data to help you choose the right one(s) for your situation.
My plan is to keep this list updated going forward. As the calculator landscape changes, I will continue to learn about new calculators. Some older calculators may become obsolete. So programs will come and go, but the list below will always represent my current recommendations. (You may want to bookmark this page for future reference.)
Only about one out of every three calculators made it onto my list. So, how did I choose them? Here are my criteria:
- I favored general-purpose tools that take a set of financial inputs and model them over time — suitable for traditional pre- and post-retirement, or early-retirement scenarios. (Not every tool below is that general, but most are.)
- I was looking for something beyond trivial time-value-of-money analysis: Each calculator chosen needed to offer some unique value — either in its user interface, its approach, or its analytical power.
- I did not include a few well done but overly simplistic tools, intended for those with no financial experience. (I can assume that readers of this blog have at least a minimum of financial sophistication.)
- Conversely, I did not include tools targeted at professional advisors (with price tags to suit), or tools that were obvious loss-leaders for other bundled financial services (conflict of interest), or tools that were highly-technical or research-oriented.
- I gave weight to reputation and precedent. In general, I wanted to see established companies or well-known individuals who could support their tools, with ongoing development, and an established user base, if possible.
I’ve run each of the programs below, in some form, and worked with many of them extensively. However, I did not attempt to verify results mathematically. There are simply too many variables involved and too many judgment calls on the part of programmers for me to issue an opinion that a given calculator is “right” or “wrong.” Any calculator, in any given scenario, can be caught making some simplifying assumption about reality that somebody will argue is incorrect. I don’t want to play that game.
But, do realize that, in an attempt to make retirement modeling “easy,” some calculators make assumptions that may not suit your situation. For example, a surprising number of calculators continue to have problems with early retirement or near-retirement scenarios. Beware of calculators that require you to input a salary, or want to compute your expenses as some percent of your salary, or assume that Social Security must start at your “retirement” date, or that include built-in/undocumented assumptions for stock market returns, inflation, or tax rates. (Some calculators use overly optimistic market returns; others use your marginal tax rate as an effective rate, overstating your tax liabilities.)
Rather than expecting perfection out of any single software program, I suggest getting a “second opinion.” You can simply check your situation by running more than one calculator. There are enough good ones listed below, that you can easily get a 2nd (or 3rd) opinion on just about any retirement-related financial question! And I’ll make it as easy as possible for you to choose a calculator appropriate to your needs?.
As part of my survey, I’ve compiled several columns of key data into the table below, to help you understand how each calculator fits into the field:
Fidelity: First, I’ve categorized all the calculators into three levels of “fidelity.” Credit goes to Stuart Matthews of Pralana Consulting for this helpful concept. By fidelity we are referring to how well each calculator can potentially reproduce reality — the realism of its simulation. In a nutshell, to do a better modeling job, a calculator will need to collect more data, and more accurate data, from you. So, “fidelity” is also a rough measure of increasing complexity:
- Low-Fidelity — these calculators will feature just a dozen input fields or less, and usually perform only a simple fixed rate/average return calculation. They feature ease of use, and generally will require less than 5 minutes of your time to produce answers.
- Medium-Fidelity — these calculators add additional fields, usually handling multiple accounts with different asset allocations, and arbitrary financial “events” such as irregular future income or expenses. Generally they might require 10-20 minutes of your time to produce answers.
- High-Fidelity — these calculators will add even more input fields, the ability to compare scenarios, and often Social Security and tax calculations. Generally they will require at least 30-60 minutes of your time to produce answers. And they could easily require several hours to understand all the options, and collect and input all the data to take full advantage of their capabilities. But these calculators have the potential to be most accurate, assuming you take the time to enter good data, and assuming your guesses about the future hold true.
Returns: Broadly speaking, there are three approaches to modeling stock market returns over time:
- Using an average return for each year is the simplest approach. However, unless you reduce that average return by some arbitrary amount, it does not take into account the impact of volatility on your portfolio, and will be overly optimistic.
- A Monte Carlo analysis, using an average return plus a standard deviation, takes volatility into account, but requires expertise (or trust) for choosing the necessary mathematical parameters. And there are arguments that the artificial randomness introduced by a Monte Carlo simulation doesn’t mimic the real world accurately.
- Finally, a historical analysis uses actual market data on the performance of asset classes over the past century to model what would have happened to your portfolio over periods in the past. The issue with this approach is whether the future will be like the past or, even if it is, whether the current starting point of high market valuations leads predominantly into the realm of lower return possibilities.
There are arguments, and recognized experts, for and against each way of modeling returns. Who’s right? My own preference is to gather as much information as possible, by using calculators that offer all three mechanisms, then compare the results, and draw my own conclusions.
Platform: The majority of modern retirement calculators run in your browser as web applications. If you want the slickest user experience, you’ll probably opt for one of these. However a few calculators run on your desktop or tablet, using Microsoft Excel, iOS, or Windows. If you’d rather keep your financial data on your local computer, you might opt for one of these.
Cost: Many retirement calculators are free, including good ones at each fidelity level. But a few calculators are offered in different fidelities at different price points. When there are multiple versions, I’ve included the range of costs in the table below. In general: I’ve reviewed the highest-fidelity version available, it includes all the features of any lower versions, and the lower versions are also worthy of your consideration.
Notes/Features: I’ve included brief notes on the features of each program, so you can get the flavor of its functionality. I’ve tried to standardize terms when possible: “Income replacement” means the calculator wants to estimate your expenses as a % of income (a negative if it precludes early- or post-retirement scenarios). “Spouse” means there are dedicated fields for a spouse’s data. “Spending policies” means the calculator offers algorithms for automatically adjusting your spending in retirement. “Financial events” means the calculator allows entering arbitrary incoming or outgoing cash flows into the simulation. “Scenarios” means you get some capability for comparing financial alternatives. “Tax calculations” means the calculator goes beyond using a simple effective tax rate to perform detailed marginal tax calculations. “Today’s dollars” means there is an ability to display results in real (inflation-adjusted) dollars. “Save data” means you can save your work. “Well documented” means the calculator does an above-average job of explaining its assumptions.
Review: If I’ve written a review of the calculator, it will be linked from a review date. If there is no link from a review date, then that is simply the last date that I updated information on the calculator in this table.
Choosing a Calculator
Below is my list of the best calculators, for your consideration. All of these calculators have unique strengths. But each has its limitations too. So, how do you choose?
Price should not be an issue: There are free calculators available at all fidelity levels. If you have a preferred platform, that may help filter your list. Most importantly, decide how accurate an answer you need, and how much time you want to invest in getting it:
If you just need a simple answer to whether your savings are roughly on track to retire in a certain time frame, you should start with the low-fidelity calculators to get quick answers.
If you want to fine-tune the results more to your specific situation, perhaps looking at how your mixture of assets and future financial events will impact your wealth, start with the medium-fidelity calculators.
If you have substantial assets and need to fine-tune a tax or withdrawal strategy in retirement, or you want to model a range of future life events and compare alternative courses of action, use a high-fidelity calculator.
In any case, you’ll want to use more than one calculator, to confirm your results. For the low-fidelity calculators, I’d run three programs before drawing any conclusions, because they are so simple and easy to use. For the medium-fidelity calculators, I’d choose at least two programs. You can become proficient in both without a big time commitment. If you need a high-fidelity calculator, I would review the field of choices, then become expert with the one that makes most sense to you. After that, I’d choose a medium-fidelity calculator to rough-check results.
Note that you can sort the list below in different ways by clicking on the double-headed arrow at the top of any column. And you can search or filter by simply typing into the Search box at the top right. Finally, I’ve included the link to each calculator so you can easily try it out for yourself: Just click on the name.
Best wishes in your retirement planning. And let me know your experience, so I can continue to update and improve this list for everybody’s benefit?.
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