AARP Retirement Savings Calculator
Planning for retirement can feel overwhelming, but understanding your potential financial future is the first step towards a secure retirement. The AARP Retirement Savings Calculator helps you estimate if your current savings and contributions are on track to meet your desired annual income in retirement. By inputting key financial details, you can get a clearer picture of your retirement readiness and identify areas where you might need to adjust your strategy.
Your Retirement Outlook:
Error: Please enter valid numbers for all fields.
'; return; } if (desiredRetirementAge <= currentAge) { document.getElementById('retirementResult').innerHTML = 'Error: Desired Retirement Age must be greater than your Current Age.
'; return; } if (lifeExpectancy <= desiredRetirementAge) { document.getElementById('retirementResult').innerHTML = 'Error: Life Expectancy must be greater than your Desired Retirement Age.
'; return; } if (currentSavings < 0 || annualContribution < 0 || desiredAnnualIncome < 0 || socialSecurityIncome < 0) { document.getElementById('retirementResult').innerHTML = 'Error: Savings, contributions, and income values cannot be negative.
'; return; } // — Calculations — var yearsToRetirement = desiredRetirementAge – currentAge; var yearsInRetirement = lifeExpectancy – desiredRetirementAge; // 1. Future Value of Current Savings var fvCurrentSavings = currentSavings * Math.pow(1 + preRetirementReturn, yearsToRetirement); // 2. Future Value of Annual Contributions (Future Value of an Ordinary Annuity) var fvContributions; if (preRetirementReturn === 0) { fvContributions = annualContribution * yearsToRetirement; } else { fvContributions = annualContribution * ((Math.pow(1 + preRetirementReturn, yearsToRetirement) – 1) / preRetirementReturn); } // 3. Total Savings at Retirement var totalSavingsAtRetirement = fvCurrentSavings + fvContributions; // 4. Inflation-Adjusted Desired Annual Income var inflationAdjustedDesiredIncome = desiredAnnualIncome * Math.pow(1 + inflationRate, yearsToRetirement); // 5. Inflation-Adjusted Social Security Income var inflationAdjustedSocialSecurity = socialSecurityIncome * Math.pow(1 + inflationRate, yearsToRetirement); // 6. Net Annual Income Needed from Savings var netIncomeNeededFromSavings = inflationAdjustedDesiredIncome – inflationAdjustedSocialSecurity; // 7. Annual Income Your Savings Can Support (Withdrawal Rate Calculation) var annualIncomeSupportedBySavings; if (yearsInRetirement <= 0) { annualIncomeSupportedBySavings = totalSavingsAtRetirement; } else if (postRetirementReturn === 0) { annualIncomeSupportedBySavings = totalSavingsAtRetirement / yearsInRetirement; } else { // PMT = PV * (r / (1 – (1 + r)^-n)) annualIncomeSupportedBySavings = totalSavingsAtRetirement * (postRetirementReturn / (1 – Math.pow(1 + postRetirementReturn, -yearsInRetirement))); } // — Display Results — var resultTotalSavings = document.getElementById('resultTotalSavings'); var resultNeededIncome = document.getElementById('resultNeededIncome'); var resultSupportedIncome = document.getElementById('resultSupportedIncome'); var resultOverallStatus = document.getElementById('resultOverallStatus'); var resultAdvice = document.getElementById('resultAdvice'); resultTotalSavings.innerHTML = 'Estimated Total Savings at Retirement: $' + totalSavingsAtRetirement.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }); resultNeededIncome.innerHTML = 'Estimated Annual Income Needed from Savings (inflation-adjusted): $' + Math.max(0, netIncomeNeededFromSavings).toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }); resultSupportedIncome.innerHTML = 'Annual Income Your Savings Can Support: $' + annualIncomeSupportedBySavings.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }); var statusMessage = "; var adviceMessage = "; if (netIncomeNeededFromSavings <= 0) { statusMessage = 'Excellent!'; adviceMessage = 'Your estimated Social Security income is projected to cover or exceed your desired annual retirement income. Your savings will provide additional financial security or allow for a higher standard of living.'; } else if (annualIncomeSupportedBySavings >= netIncomeNeededFromSavings) { statusMessage = 'On Track!'; var surplus = annualIncomeSupportedBySavings – netIncomeNeededFromSavings; adviceMessage = 'Your estimated savings are projected to support your desired annual income. You could have an extra $' + surplus.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' per year, or your savings could last longer.'; } else { statusMessage = 'Needs Improvement.'; var deficit = netIncomeNeededFromSavings – annualIncomeSupportedBySavings; adviceMessage = 'Your estimated savings are not quite enough to support your desired annual income. You need an additional $' + deficit.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' per year from savings.'; // Calculate how much more savings are needed at retirement to cover the deficit var requiredAdditionalSavings; if (postRetirementReturn === 0) { requiredAdditionalSavings = deficit * yearsInRetirement; } else { requiredAdditionalSavings = deficit * ((1 – Math.pow(1 + postRetirementReturn, -yearsInRetirement)) / postRetirementReturn); } adviceMessage += ' To achieve this, you would need approximately $' + requiredAdditionalSavings.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' more in savings at retirement.'; } resultOverallStatus.innerHTML = 'Overall Status: ' + statusMessage; resultAdvice.innerHTML = adviceMessage; }Understanding Your Retirement Outlook
The AARP Retirement Savings Calculator provides a personalized estimate of your financial readiness for retirement. It considers several crucial factors to project your savings growth and how much income those savings can generate during your retirement years.
Key Inputs Explained:
- Current Age & Desired Retirement Age: These determine the number of years you have left to save and invest. The longer your savings horizon, the more time your money has to grow.
- Estimated Life Expectancy: This helps estimate how many years your retirement savings will need to last. A longer life expectancy means your funds need to stretch further.
- Current Retirement Savings: The total amount you've accumulated in retirement accounts (e.g., 401(k), IRA) to date.
- Annual Savings Contribution: The amount you plan to save each year until retirement. Consistent contributions are vital for compounding growth.
- Expected Annual Return (Pre-Retirement): The average annual growth rate you anticipate on your investments before you retire. This rate significantly impacts your total savings at retirement.
- Expected Annual Return (Post-Retirement): The average annual growth rate you anticipate on your investments during your retirement years, while you are making withdrawals.
- Desired Annual Retirement Income (Today's $): The amount of income you believe you'll need each year in retirement, expressed in today's dollars. The calculator adjusts this for inflation.
- Estimated Annual Social Security Income (Today's $): Your projected annual Social Security benefits, also in today's dollars. This income source can significantly reduce the amount you need to draw from your personal savings.
- Expected Annual Inflation Rate: The rate at which the cost of living is expected to increase. This is crucial for understanding the future purchasing power of your money and adjusting your desired income.
Interpreting Your Results:
The calculator provides three key figures:
- Estimated Total Savings at Retirement: This is the projected lump sum you'll have saved by your desired retirement age, considering your current savings, future contributions, and pre-retirement investment growth.
- Estimated Annual Income Needed from Savings (inflation-adjusted): This is the portion of your desired annual retirement income that your personal savings will need to cover, after accounting for inflation and your estimated Social Security benefits.
- Annual Income Your Savings Can Support: This figure shows how much annual income your projected total savings can realistically provide throughout your retirement, based on your post-retirement investment return and life expectancy.
The "Overall Status" will tell you if you are "On Track" or "Needs Improvement," along with specific advice on any surplus or deficit. Remember, these are estimates. Regular review and adjustments to your savings plan are essential.
Disclaimer:
This calculator is for informational and educational purposes only and should not be considered financial advice. The results are estimates based on the inputs provided and various assumptions (e.g., consistent returns, inflation rates). Actual results may vary significantly. It is recommended to consult with a qualified financial advisor to create a personalized retirement plan tailored to your specific circumstances and goals.