Perhaps the most important point about saving for retirement is start as early as possible, because the sooner you start, the more likely you are going to achieve your financial goals and have the money to do the things you want to do in your retirement.
So in my savings calculator for retirement you have to be aware of inflation because what you can buy with a dollar now, will not be possible in 10,20,30 and certainly not 40 years time. For instance, when I was a kid a loaf of bread cost about 50 cents, now the average in this part of the world is more like $2.50.
The next step in my savings calculator for retirement is to ask yourself the question ‘how long am I going to be retired for?’ and for most people who plan to retire around the age of 60, the answer should really be 40 years. This is not excessive, even though most people don’t live to the age of 100, because I’ve heard of quite a few stories that retirees start running out of money – and who wants that sort of pressure when you are potentially old and feeble?!
This next idea you probably won’t come across in a more traditional style of savings calculator for retirement. This idea is: don’t count on any government assistance at all. I’m well aware that at this point in time governments in a number of countries provide some sort of financial assistance to the seniors of society through pensions and/or subsidized services such as health care and housing. Just because these services or payments are available now, does not mean they will be there in the future. The reason being that the post WW2 baby boomer generation is now starting to reach retirement age and they make up approximately 20 percent of the entire population in the US. That approximate statistic would be somewhat accurate in many countries. The effect of the baby boomers retiring is that more and more people will be eligible for government support with fewer tax payers to provide the income. I believe that the end result is government support will significantly diminish over the next 20 years and this will happen in many countries.
The next thing to look at in my savings calculator for retirement is health. None of us can guarantee that will be fit and healthy. Sadly, most of us will experience a significant decline in health over a number of years and that translates into a huge cost. If you want to make sure that you will get the health care that you want, then its better to budget for this.
Obviously any savings calculator for retirement will deal with the day to day living expenses and this is very important, especially to allow for inflation over a long period of time.
My final tip in my savings calculator for retirement is to understand that the economy goes in cycles and every so often there is a recession where invested money looses a significant amount of value. For instance, in my lifetime, there has been a stock market crash in the late 1980’s, the ‘dot.com’ bubble burst that affected the stock market in the late 1990’s and in recent years, the global financial crisis.
I know my savings calculator for retirement is different to most, but I hope it has given you useful information.
All the very best for your future.