Using Retirement Calculators as Financial Planning Tools

May 21, 2019

One of the great things about the internet is how easy it’s become to find information via a quick Google search. But one of the worst things about the internet is how confusing, and ultimately unhelpful, your search results can often be. Between factors such as search engine optimization, paid advertising, and an overall glut of potential options, it can be hard to know if what you’re clicking on is really giving you the best available information.

Take retirement calculators. On the surface, they offer an efficient way to create a snapshot of your current financial situation and assess any changes you might want to make as you plan your post-work life. We already know how important it is for you to start retirement planning as early as possible, so the fact that you’re trying to find this information is a good start.

But Googling the phrase “best retirement calculator” nets literally tens of millions of search results. If you’re like most people, you won’t scroll past the first handful of options. And even if you can find articles from reputable publications that rank these tools, the lists may contradict each other or be outdated. (There’s also the annoying and often unavoidable tendency of “free” calculators that take you through all the steps but require you to register for something to receive your results.)

That’s not to say that you won’t find any good tools online. The authors of this article have taken the time to construct a thoughtful ranking of currently available retirement calculators (though it does include some examples of the not-quite-free options mentioned above).

Perhaps the best bit of advice is to use an online calculator as just one part of your retirement planning. Get a basic picture of your financial situation, but then stick to the fundamentals. Regardless of your individual financial profile, the basic rules remain unchanged:

So if you want to get a general idea of your retirement profile and status, an online calculator may spit out a reasonably accurate number. But if you want to construct a detailed long-term plan that will genuinely secure your retirement, you need to be willing to get in the weeds.