This calculator provides a simplified estimate based on principles similar to MaxiFi Planner, aiming to help you understand if your current savings and spending plans can sustain your desired lifestyle throughout retirement. It projects your assets and estimates the capital needed to cover your desired discretionary spending, factoring in inflation and investment returns.
Your Retirement Plan Summary:
Projected Total Assets at Retirement:
Capital Required to Fund Desired Spending:
Retirement Gap/Surplus:
Additional Annual Savings Needed to Close Gap:
Understanding Your MaxiFi Retirement Plan
The MaxiFi Planner, and similar sophisticated financial planning tools, aim to help individuals maximize their sustainable lifetime discretionary spending while ensuring financial security. Unlike simple "nest egg" calculators, MaxiFi considers a holistic view of your finances, including all income sources, expenses, assets, and liabilities over your entire lifespan, and then optimizes for the best possible spending path.
This simplified MaxiFi Retirement Planner helps you assess key aspects of your retirement readiness by projecting your future assets and estimating the capital required to support your desired lifestyle. It's a powerful way to identify potential shortfalls or surpluses and adjust your financial strategy accordingly.
How the Calculator Works:
Current Age, Desired Retirement Age, Life Expectancy: These inputs define your pre-retirement accumulation phase and your post-retirement spending phase.
Current Annual Savings: The amount you are currently saving each year towards retirement.
Current Investment Portfolio Value: Your existing retirement savings and investments.
Expected Annual Social Security/Pension Income: Guaranteed income streams you anticipate receiving in retirement. This is entered in today's dollars and the calculator adjusts it for inflation.
Desired Annual Discretionary Spending in Retirement: Your target annual spending on non-essential items (travel, hobbies, dining out, etc.) in retirement, expressed in today's dollars. The calculator inflates this to your retirement year.
Expected Annual Investment Return (Pre-Retirement): The average annual growth rate you expect on your investments before you retire.
Expected Annual Investment Return (Post-Retirement): The average annual growth rate you expect on your investments during retirement.
Expected Annual Inflation Rate: The rate at which you expect the cost of living to increase, impacting both your future spending needs and the real value of your returns.
Interpreting Your Results:
Projected Total Assets at Retirement: This is the estimated total value of your investment portfolio when you reach your desired retirement age, considering your current savings, annual contributions, and pre-retirement investment returns.
Capital Required to Fund Desired Spending: This is the lump sum amount you would need at the start of retirement to cover your desired annual discretionary spending (adjusted for inflation) throughout your life expectancy, after accounting for your Social Security/pension income and post-retirement investment returns.
Retirement Gap/Surplus: This indicates whether your projected assets at retirement are sufficient to meet your capital requirements. A positive number means a surplus, while a negative number indicates a gap.
Additional Annual Savings Needed: If there's a gap, this figure tells you how much more you would need to save each year (starting now) to close that gap by your retirement age, assuming the same pre-retirement investment return.
Example Scenario:
Let's consider a 40-year-old individual planning to retire at 65 and live until 90. They currently save $10,000 per year and have a portfolio of $150,000. They expect $25,000 annually from Social Security/pension (in today's dollars) and desire $50,000 in discretionary spending (in today's dollars). With a 7% pre-retirement return, 5% post-retirement return, and 3% inflation:
Years to Retirement: 25 years
Years in Retirement: 25 years
Projected Total Assets at Retirement: Approximately $1,446,000
Capital Required to Fund Desired Spending: Approximately $1,024,000
Retirement Gap/Surplus: Approximately $422,000 Surplus
In this scenario, the individual is on track with a significant surplus. If there were a gap, the calculator would suggest additional annual savings required to meet the goal.
Remember, this calculator provides estimates. For a comprehensive financial plan, consider consulting a financial advisor or using advanced planning software like MaxiFi Planner.
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function calculateMaxiFiRetirement() {
// Get input values
var currentAge = parseFloat(document.getElementById('currentAge').value);
var retirementAge = parseFloat(document.getElementById('retirementAge').value);
var lifeExpectancy = parseFloat(document.getElementById('lifeExpectancy').value);
var currentAnnualSavings = parseFloat(document.getElementById('currentAnnualSavings').value);
var currentPortfolioValue = parseFloat(document.getElementById('currentPortfolioValue').value);
var expectedSSPension = parseFloat(document.getElementById('expectedSSPension').value);
var desiredSpending = parseFloat(document.getElementById('desiredSpending').value);
var preRetirementReturn = parseFloat(document.getElementById('preRetirementReturn').value) / 100;
var postRetirementReturn = parseFloat(document.getElementById('postRetirementReturn').value) / 100;
var inflationRate = parseFloat(document.getElementById('inflationRate').value) / 100;
// Input validation
if (isNaN(currentAge) || isNaN(retirementAge) || isNaN(lifeExpectancy) ||
isNaN(currentAnnualSavings) || isNaN(currentPortfolioValue) ||
isNaN(expectedSSPension) || isNaN(desiredSpending) ||
isNaN(preRetirementReturn) || isNaN(postRetirementReturn) || isNaN(inflationRate)) {
document.getElementById('result').innerHTML = 'Please enter valid numbers for all fields.';
document.getElementById('result').style.display = 'block';
return;
}
if (currentAge <= 0 || retirementAge <= 0 || lifeExpectancy <= 0 ||
currentAnnualSavings < 0 || currentPortfolioValue < 0 ||
expectedSSPension < 0 || desiredSpending < 0 ||
preRetirementReturn < 0 || postRetirementReturn < 0 || inflationRate < 0) {
document.getElementById('result').innerHTML = 'Please enter positive values for all fields (or zero for savings/income if applicable).';
document.getElementById('result').style.display = 'block';
return;
}
if (retirementAge <= currentAge) {
document.getElementById('result').innerHTML = 'Desired Retirement Age must be greater than Current Age.';
document.getElementById('result').style.display = 'block';
return;
}
if (lifeExpectancy 1e-9) { // Check if preRetirementReturn is effectively greater than zero
fvAnnualSavings = currentAnnualSavings * ((Math.pow((1 + preRetirementReturn), yearsToRetirement) – 1) / preRetirementReturn);
} else { // If preRetirementReturn is 0, it's just savings * years
fvAnnualSavings = currentAnnualSavings * yearsToRetirement;
}
// 5. Total Projected Assets at Retirement (Total_Assets_Retirement)
var totalAssetsAtRetirement = fvCurrentPortfolio + fvAnnualSavings;
// 6. Inflation-Adjusted Desired Spending at Retirement (Spending_Retirement)
var spendingAtRetirement = desiredSpending * Math.pow((1 + inflationRate), yearsToRetirement);
// 7. Inflation-Adjusted Social Security/Pension (SS_Pension_Retirement)
var ssPensionAtRetirement = expectedSSPension * Math.pow((1 + inflationRate), yearsToRetirement);
// 8. Net Annual Spending Needed from Portfolio (Net_Spending_Portfolio)
var netSpendingFromPortfolio = spendingAtRetirement – ssPensionAtRetirement;
if (netSpendingFromPortfolio 0 && yearsInRetirement > 0) {
var realPostRetirementRate = ((1 + postRetirementReturn) / (1 + inflationRate)) – 1;
if (Math.abs(realPostRetirementRate) 0)
var additionalSavingsNeeded = 0;
if (retirementGapSurplus 0) { // Only calculate if there's time to save
if (preRetirementReturn > 1e-9) {
additionalSavingsNeeded = gap / ((Math.pow((1 + preRetirementReturn), yearsToRetirement) – 1) / preRetirementReturn);
} else { // If preRetirementReturn is 0, it's just gap / years
additionalSavingsNeeded = gap / yearsToRetirement;
}
} else {
additionalSavingsNeeded = gap; // If no years to retirement, the gap must be covered immediately
}
}
// Display results
document.getElementById('projectedAssets').innerText = '$' + totalAssetsAtRetirement.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 });
document.getElementById('capitalRequired').innerText = '$' + capitalRequired.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 });
var gapSurplusText = ";
if (retirementGapSurplus >= 0) {
gapSurplusText = '$' + retirementGapSurplus.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' Surplus';
document.getElementById('retirementGapSurplus').style.color = '#28a745'; // Green for surplus
document.getElementById('additionalSavingsRow').style.display = 'none';
} else {
gapSurplusText = '$' + Math.abs(retirementGapSurplus).toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + ' Gap';
document.getElementById('retirementGapSurplus').style.color = '#dc3545'; // Red for gap
document.getElementById('additionalSavingsRow').style.display = 'block';
document.getElementById('additionalSavingsNeeded').innerText = '$' + additionalSavingsNeeded.toLocaleString('en-US', { minimumFractionDigits: 0, maximumFractionDigits: 0 });
}
document.getElementById('retirementGapSurplus').innerText = gapSurplusText;
document.getElementById('result').style.display = 'block';
}