Get Real
Presenting U.S. News's ultimate retirement calculator--the essential tool you need to plot your strategy for the future
WHAT YOU'LL NEED. Details of your savings and pensions. Plus a pencil.
MARRIED OR SINGLE? For two-paycheck households, we recommend that each wage earner figure retirement needs independently, making a common-sense split of items such as joint investments.
THE FINE PRINT. The results of these work sheets will only be as accurate as the assumptions you use.
WORK SHEET 1
What will it take to maintain my standard of living?
1. Enter your current annual income (before taxes).
Many retirees find their cost of living is lower than during their working years. Expenses such as commuting are a thing of the past; so are payroll taxes. And many retired people have paid off their mortgage. With this in mind, Watson Wyatt Worldwide, a benefits consulting firm, has drawn up the following table. It shows in percentage terms how much income a typical worker needs to replace to maintain his or her standard of living in retirement.
Health insurance status Age at retirement
after retirement 55 60 62 65 70
Single/covered by employer plan 0.64 0.68 0.71 0.74 0.74
Couple/covered by employer plan 0.68 0.71 0.73 0.75 0.75
Single/no plan 0.72 0.74 0.75 0.76 0.76
Couple/no plan 0.76 0.77 0.77 0.78 0.78
2. Using the table as a guideline, enter the percentage of income you wish to replace in retirement (use 0.75 for 75 percent).
3. Multiply line 1 by line 2. This is how much you'll need each year in retirement to finance your desired standard of living.
WORK SHEET 2
How much will I need to save for retirement?
1. Enter amount from work sheet 1, line 3.
The earlier you retire, the longer you'll need retirement income. The chart below estimates your long-term needs. It has built-in assumptions: You'll receive 1 percent annual real wage increases, you'll live to age 90, and you'll leave no estate.
Years until you retire
Retirement age 0 5 10 20 30 40
55 19.4 20.2 21.2 23.5 25.9 28.6
60 18.0 18.7 19.7 21.7 24.0 26.5
62 17.3 18.0 19.0 20.9 23.1 25.5
65 16.2 16.9 17.8 19.6 21.7 24.0
70 14.1 14.7 15.5 17.1 18.9 20.8
2. Enter the factor that most closely applies to you.
3. Multiply the amount in line 1 by line 2. This is your lifetime retirement savings need, before adjustment for changes in benefits and tax rates.
WORK SHEET 3
What happens if Medicare is reduced?
The Medicare trust fund is officially projected to be exhausted in 10 years. Because of this, there is a strong possibility that Medicare benefits will be less generous in the future. On line 1, enter 1 if you don't expect to collect Medicare, 0 if you thin Medicare will continue as is. Enter a fraction if you expect partial cuts (e.g. .25 if you expect a 25 percent cut).
1. Amount by which insurance value of Medicare will be cut.
2. The current annual market value of your entitlement to Medicare is: $5,058
3. This is the amount of health care insurance you'll need to replace.
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