Web's Best Retirement Income Calculators

A list of both detailed and simple one page retirement income calculators

Retirement Calculators
Retirement income calculators help you see how long your money will last in retirement. Colin Anderson/Getty Images

Retirement calculators can be quite useful, but finding one that is accurate is difficult. There are hundreds of options to choose from. The problem, noted in the February 2016 research paper The Efficacy of Publicly Available Retirement Planning Tools, is that "the advice provided from a majority of these tools is extremely misleading to households." 

One retirement calculator may lead you to believe you will have thousands more in retirement income than another.

One tool may say you're likely to run out of money, while another may say you'll have more than enough. This issue is documented in the presentation The Looming Problem with Retirement Planning Calculators hosted by the Retirement Income Industry Association.

So how do you know which retirement calculator to use? It depends on your life phase and how complex your situation is.

To do my own assessment, I began working with a bright young intern, CJ Miller, and asked him to create a scorecard that we could use to measure a few popular online calculators. CJ ran an identical scenario though nine online retirement calculators. The variation in answers was frightening. We used the results to finalize the criteria we wanted to use in our scorecard, and we weighted accuracy as the most important component. The more accurate the inputs in the tool, the less likely you are to get a wildly inaccurate result.

In the scorecard, shown below, there are three main criteria; accuracy, usability, and education. Each calculator was assigned a ranking of 1, 2, or 3 in each category, with 3 being the best. We weighted accuracy at 60% of the final score, with usability and education each representing 20%. You can find a detailed analysis of each retirement calculator reviewed where CJ spells out the pros and cons of each online calculator that was tested.

Retirement Calculator Scorecard

 AccuracyUsabilityEducationWeighted Result
ESPlanner Basic3333
New Retirement3322.8
AARP3222.6
MarketWatch3122.4
T. Rowe Price2322.2
Schwab 2222
Vanguard1321.6
Bankrate2111.6
Fidelity1211.2

 

Below is an explanation of how we defined each component of the scorecard.

Accuracy

The Accuracy component of the retirement calculator scorecard refers to the reliability of the results being displayed. You need to know a program's results are trustworthy. You do not want any illusions of grandeur when making final retirement plans. The worst mistake a retiree can make is planning only for the best-case scenario. After researching several online tools, it is evident that some project only the best-case scenario, which can leave users at risk of falling short of their retirement goals.

A calculator with a high score in accuracy will be versatile. This means it will offer a lot of various input options that allow you to customize the data in a way that matches your situation. These options include, but are not limited to, the ability to customize inputs for Social Security, pensions, inflation, advanced expense scheduling, differing retirement dates between spouses, etc.

The reason a versatile calculator is more accurate is because it is capturing more data points and thus minimizing the risk of a simplified output that is relying on inaccurate data.

Usability

Usability incorporates several components, such as ease of use and visual appeal. This is important, because a tool that is hard to read is hard to understand. Personally, CJ and I both like tools that utilize graphs in addition to numbers. Visually seeing how the money comes and goes can help get the point across.

Another key component to usability is the ability to easily modify inputs. A tool that allows for modification on the results page is especially useful, because it prevents users from having to restart the entire process if they make a mistake, or want to run an alternate plan. Along the same lines, having the option to save is always beneficial because you may underestimate the time needed to complete the process, or you may need time to gather the right information. 

Education

The education component of the score consists of the tool's explanation of the methodology, help features, and general guidance. A retirement calculator that scores well in this area will not only possess these, but will present them in an effective way. A calculator that explains everything well, but does not allow the user to easily find the explanation will not score well in this area. For example, sometimes methodology is well explained, but it is hidden at the bottom of the website in a terms and conditions page. This renders it almost useless, because most users will not read it or take it into account when completing the calculator.

Guidance is another important criteria in this category. It is the portion of the program that gives advice, and explains possible next steps. This is not present in most retirement calculators, and can be the most valuable part of the tools that do provide it. Guidance is usually displayed at the end of a program, or throughout the inputs page on the side of the page.

Tax Calculations in Retirement

Another problem with traditional retirement calculators is they often do not give you an accurate picture of what your after-tax retirement income will be. It is likely you will pay taxes in retirement, and the amount of tax you pay will depend on many factors that are missed by most retirement calculators.

Although a retirement calculator is a good start, an experienced retirement planner can help you develop a customized plan that fits your situation.

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