5 Tools for Retirement Planning
Free Calculators and Resources to Help You Prepare
Retirement planning requires that you attempt to predict the future and make assumptions about several complicated factors. Perhaps for this reason, many Americans don’t take the necessary steps to properly prepare for what’s to come. According to Northwestern Mutual’s 2019 Planning & Progress Study, more than one-fifth of Americans have less than $5,000 saved for retirement, and 46% of working adults expect to work after the traditional retirement age of 65.
If you find yourself in that category, don't panic.
We highlight several retirement planning tools that can ease the stress of planning and help you understand how retirement might unfold for you. These are all found online, so you don’t need to be a spreadsheet expert or install any software. Plus, most of these tools are free, so you can gain insight without too much of a commitment.
Retirement Income Calculators
Retirement calculators help you understand when you can retire, how much you can afford to spend, and more. They answer the big-picture questions as you approach retirement, and they usually account for inflation, taxes, investment returns, and other essential elements of the process.
Depending on how much time and energy you want to spend, you have several choices. No calculator is perfect, but running multiple what-if scenarios with a calculator helps you understand which decisions have the biggest impact on your retirement.
Family-owned New Retirement offers a robust retirement calculator with an impressive level of customization. You can provide details about assets and income—all found within each menu item under “My Plan” on the website—for yourself and a partner, such as:
- Social Security benefits
- Pension income (or a lump sum payout)
- Balances in investment accounts (with categories for pre-tax, Roth, and other forms of tax treatment)
- How much, on average, you save for retirement each year
After entering information about your finances, you end up with a detailed chart that shows annual cash flows. Color-coded bars tell you more about each category of income or expense, and a “score” provides additional feedback on your plan.
The free version restricts how much you can customize your plan, but additional tools are available with the premium PlannerPlus option (available for $6 per month, or $72 annually). For example, you can’t specify your rate of return on investments, model Roth conversion strategies, or view annual cash flow tables and account values with the free plan. However, New Retirement offers a 14-day free trial of PlannerPlus (credit card required).
Vanguard’s retirement income calculator is a quick retirement planning tool that gives basic information about your retirement readiness. You start by entering your information in narrative form. Next, to adjust your inputs, Vanguard provides “sliders” that make it easy to evaluate how different strategies affect your plan.
The Vanguard calculator allows you to enter the following details:
- Social Security estimates
- Pension income
- Balances designated for retirement
- Additional savings
While beneficial, Vanguard’s tool is also limited, in that you can provide information about your retirement savings, but there are no specifics surrounding the tax status for each holding. As a result, the tool does not provide meaningful information about after-tax spending.
Vanguard’s calculator only allows you to provide information for one person. If you’re married or you combine finances with a partner, you may need to double some of the inputs. While that’s not ideal, you can quickly get a ballpark idea of how you’re doing.
Social Security Website
The Social Security Administration website is crucial for understanding your Social Security benefits. In addition to estimates on your retirement benefit, the site provides several calculators and a wealth of educational material.
To learn about your future benefits, it’s best to log into your account at SSA.gov. There, you can find out how much income you might expect at age 62, your “full retirement age,” and any other age you’re curious about. You can also tell Social Security to assume higher or lower earnings going forward. For example, if you plan to retire or scale back next year, you can specify an average future salary to see how reduced earnings affect your eventual retirement benefit.
In addition to getting estimates, the Social Security website has articles that can help you better understand your retirement benefit. For example, if you work for a government organization with a pension, it’s critical to learn about the Government Pension Offset. You can also learn if and when you pay taxes on your Social Security income.
Check your Social Security account periodically to make sure your earnings record is accurate.
Health Care Cost Projections
Health care is an essential expense in retirement, and you might not be accustomed to paying premiums or selecting health plans. Fortunately, several tools can help prepare you for what to expect when you eventually stop working.
For detailed estimates, it’s best to check with an insurance provider in your area. However, you can get a quick estimate with a few clicks online, as well.
Overall Health Care Spending
If you don’t know where to begin, insurance company TIAA offers a big-picture estimate of your health care spending through its online calculator. TIAA gathers basic information and provides monthly (as well as lifetime) estimates of how much you’ll spend, broken down by premium and out-of-pocket expenses. You can choose specific health conditions, such as cardiovascular disease or diabetes, to see how they affect your costs, but there are only a few conditions on the list of choices.
Medicare’s Out-of-Pocket Cost Estimator provides detailed information on how much you might expect to spend, and you can include Medigap or Medicare Advantage plans in your analysis too. Although you don’t enter specific conditions, the tool asks whether you have good, average, or bad health. You can also choose whether you prefer monthly premiums that are high, medium, or low.
The official site for U.S. Medicare also offers a Medicare Plan Finder that walks you through several Medicare options, including prescription drug plans, Medicare Supplement Insurance, and Medicare Advantage plans. You can get a rough estimate of how much you’d pay for coverage in your area, as well as see basic plan features at a glance. To evaluate prescription drug coverage, you can enter medications you use and pharmacies in your area to see how pricing differs with each option.
Many individuals wish to go into retirement debt-free, as eliminating outstanding debt frees up monthly cash flow, and that’s helpful when you’re on a fixed income. Online tools can show you exactly what it takes to wipe out debts, and they may also tell you how much you save on interest.
Bay Federal Credit Union’s Debt Elimination Calculator allows you to answer two important questions:
- How much extra do you need to pay on debts to become debt-free at a specific time?
- How long will it take for you to pay off all of your debts?
You can enter details about multiple loans, and the calculator lets you choose a debt-elimination strategy, such as paying down loans with the highest rate first.
Loan Amortization Tables
Loan amortization tables can provide insight into how much interest you pay on your debt. Plus, you have full control over every payment, enabling you to build customized payoff schedules. With that information, you can curate a plan that helps you use debt wisely (if you choose to keep loans during retirement) and plan for changing income levels in retirement too. For example, if you retire next year and you know that Social Security benefits begin in three years, you can build that extra income into your model.
Immediate Annuity Calculator
If you’re considering an annuity for guaranteed income in retirement, online tools can help you explore your options. Immediate annuities pay out income that can last for as long as you (or a spouse) live, or you can choose to receive income for a set number of years.
The amount of income you receive depends on several factors, including age and deposit. An annuity calculator, such as Fidelity’s Guaranteed Income Estimator, provides quotes and helps you compare payouts under different scenarios. With Fidelity’s online annuity tool, you do not need to provide a phone number or email address, so you don’t need to worry about unwanted sales calls.
If you decide that an immediate annuity might be right for you, speak with an insurance agent to learn more about the details before you invest.
- Retirement planning covers multiple areas, and the process can be complicated
- Online tools help set expectations so you’re better prepared for retirement
- Tinkering with the numbers (or running different what-if scenarios) helps you understand which factors, such as health conditions or monthly savings, have a significant impact on your retirement
- You can improve your chances of success—and reduce surprises—with increased knowledge