Wednesday, February 21, 2018
 Article written by John V. W. Howe

# Retirement Calculators - Before and After Retirement

Calculating Our Finances Before Retirement

It seems that most of the retirement calculators on the Internet are designed by investment and securities firms whose goal is to make you invest with them and make them money. These calculators do not necessarily give you the true picture of your retirement finances.

If you plan to work after retirement and the calculator does not allow for income from a retirement job, your retirement financial projections will be off by a mile. Income from a retirement job can have a very positive impact on your retirement finances.

While researching retirement calculators on the Internet, we found three (there may be more) that include income from work after retirement. These are listed at the end of the article so keep reading.

Even these calculators have a weakness since they ask for the amount of annual income from a job after retirement, but do not ask for the age when that income will stop. They assume the income will continue until death which is not accurate. We are all living longer, but I doubt if many of us will still have a job at 90.

Calculating Our Finances After Retirement

Once we retire, the variables involved in calculating retirement finances are greatly reduced. Unless Aunt Bess leaves you an unexpected inheritance in her will, you know the amount of your retirement savings that has to last your lifetime.

Unless inflation runs away during our retirement, the major variables we have to consider are how much we budget to spend each year, the amount we make from our retirement job, and how long we choose to work at that retirement job.

Income from a retirement job has a very positive impact on your retirement finances. As a part of your retirement planning, have you thought about continuing to work after retirement?

Let's do a fast calculation and see the impact of an after retirement job on your retirement finances. Let's calculate the amount of investment that you need to generate a monthly income of \$1,000 per month.

To do this we need to make a few assumptions. Assume the income generation rate of your investments is five percent (5%). Let's assume that we are not going to take any principle from your investments to do this. This will leave the principle intact for use later after you have stopped working in your retirement job.

The calculation is how much principle is needed to generate \$12,000 per year (\$1,000 per month). The formula is principle divided by the income interest rate (\$12,000/.05 = \$240,000). I think you will agree that is a large amount necessary to generate \$1,000 of income per month.

However, a thousand dollars per month is not too large an amount to expect to make in a retirement job and just look at the impact that it has on preserving your retirement investment.

The Boomer eZine website has a retirement calculator that assists in planning after retirement. It is designed to be used upon retirement to determine how long retirement savings will last under various conditions. You can download it free and use it to test various cases for your planning.

The retirement calculator is a Microsoft Excel file so your will need to have Microsoft Excel on your computer.

To receive instructions on how to use the calculator, click the following link:

If you want to learn more about using the Internet to generate retirement income, go to Retirement Jobs Online.com (See below). The site has a well organized study guide to lead you through the process.

The retirement calculators we found on the Internet that include the provision for retirement income are:

1. AARP Retirement Calculator

2. EBRI Calculator

3. MSN Calculator

The MSN Calculator is the most visual and easiest to use. You can see very quickly what impact a retirement job has on your retirement finances.

Best wishes for a long and happy retirement.