Planning to Build Your Nest Egg
Perhaps you dream of going on a cruise around the world when you retire, reclining on a comfy lounge chair and sipping refreshing fruity drinks with little umbrellas. Or maybe you look forward to finally getting enough time to create happy memories with friends and family.
Whether these ideas resonate with you or you’ve got other ones in mind, saving for retirement can make it easier to fulfill your special dreams—and that’s exactly what our retirement calculators will empower you to do.
About Retirement Calculators
Did you start a new job and have a chance to open a 401(k)? Are you in the middle of a job, ticking down to the day you retire? Or did you recently retire? Regardless of what stage you are in planning for retirement, you probably have many questions, and our calculators can help!
Whenever you have a question about what to input in our retirement calculators, simply click on the "+" sign to the left of the subheading to find out more information.
How Long Will My Retirement Savings Last?
If you’re just about to retire, this calculator can help estimate how many years and months your savings will fund your retirement—input information in the areas for all three sections. In the text, chart, and table form, you can see how long your savings will last. Keep in mind that taxes may come into play with your retirement savings accounts—please consult with a tax advisor about deductions.
If your employer offers a 401(k) plan, know that this plan is often one of the best ways to save for your retirement. Be sure to talk to your employer about the maximum percentage they’ll match with your contributions. Once you’ve inputted the information in this calculator, you’ll have a better idea of how much you’ll save with or without the employer match! Learn more about the difference between IRAs and 401(k)s here.
Traditional 401(k) vs Roth 401(k)?
Perhaps you’d like to explore whether contributions to a traditional 401(k) or to a Roth 401(k) would have a bigger impact. If so, that is a wise issue to consider—and the answer will depend upon your specific situation.
Here are the differences between the two types of 401(k)s:
- Traditional 401(k)s: With this type of account, contributions are on a pre-tax basis. You’ll get more take-home pay in your check and, often, a lower tax bill. When eligible for withdrawals, you’ll pay taxes on ones from traditional 401(k) plans—because you didn’t when contributing.
- Roth 401(k)s: Roth 401(k) contributions, meanwhile, are after-tax ones. So, you’ll pay taxes on your contributions that same year. Withdrawals are not taxable because you paid taxes on them in your contributing years.
Now, let’s compare the two to see what’s best for you. Enter your current age, retirement age, and annual contributions into this retirement calculator. Input your rate of return, personal tax rate percentage, and your anticipated retirement tax rate. You’ll then receive information to compare your options and make the best choices for your circumstances.
Retirement Income Estimator
This calculator helps you estimate what monthly amounts you could expect your retirement account to generate. List your cumulative savings and count your number of years in retirement. Input your rate of return and tax rate percentage, and you can see what to anticipate before and after taxes. If you’re still contributing to your retirement account and aren’t satisfied with the results, then a goal can be to contribute more each year.
Spend it or Invest in an IRA?
If you’re considering a discretionary purchase, you might want to see the impact if you invested that money into your retirement account instead. Space Coast Credit Union (SCCU) makes that easy with this calculator. The answer, of course, will depend upon the amount, how far you are away from retirement years, and the rate of return you could have enjoyed in an IRA.
To get the specifics, list the amount you might spend plus your current age and retirement age. Then, input the rate of return you could earn on a retirement account and your tax rate percentage. The retirement calculator will show you the benefits of putting this amount of money into a traditional IRA. It will do the same for a Roth IRA. Then, you can make a more informed decision about whether to purchase or invest.
Estimate Social Security Benefits
When planning for retirement, what you’ll receive in monthly Social Security benefits can significantly impact you. For more in-depth information, you can head to the Social Security Administration site where calculations are based on your precise earnings and retirement date. You can estimate your benefits with our “Estimate Social Security Benefits” calculator.
Personal information needed includes your current and retirement age plus your average annual income. You can then list your spouse’s information if applicable. Then, enter the Social Security inflation percentage rate. The calculator will present you with your benefit amount today—both monthly and annually—and at your retirement age.
Save for Retirement
This calculator can streamline your planning. For your specific insights, fill out the following:
- Retirement plans: Enter your current and retirement ages, annual household income, and needed retirement income.
- Retirement assets: List your current retirement assets, monthly savings, monthly pension, and monthly Social Security.
- Assumptions: Here, input your anticipated life expectancy, annual salary increases, inflation rate, and rate of return.
You’ll then see a description of what this plan will generate in savings, plus what’s required based on your expected lifespan and spending needs during retirement. You can see the difference between the two numbers and adjust the plan to reach your unique goals and dreams.
Plan for the Future: IRA Options at SCCU
If you’ve heard the time-tested advice that it’s never too early to start planning for your future, know that, at SCCU, we wholeheartedly agree. To help, we offer IRA options to suit your needs as you plan and save for retirement: an IRA certificate of deposit (CD) and a regular IRA.
With an IRA CD, you can save more for your retirement as you benefit from a higher guaranteed rate of return. Additional benefits are the maximum amount of security and tax benefits associated with an IRA CD—and, at SCCU, you’ll also benefit from our competitive rates and flexible terms. We offer a variety of terms. You only need as little as $5006 to open your IRA CD, and there are no minimums for yearly deposits and no service fees. You can contribute up to the maximum limits established by the IRS.
With a regular IRA, you can flexibly save for the retirement you want. You can save on taxes and, with no maintenance fees, the money you put into your retirement account all works for you towards your dreams for retirement. Open an account with just $100 or with a payroll deduction, and you can seamlessly deposit up to the maximum yearly contribution limits.
Stop by the SCCU branch that’s most convenient to open your IRA. This will be a key step towards achieving what you desire in your golden years.
Frequently Asked Questions
This will depend upon many factors, including your rate of return, how much you’ll contribute, and how much your employer will match. Plus, estimates of what you’ll receive monthly will depend upon how many years you’ll have to receive that amount during retirement.
You can easily and conveniently experiment with our “401(k) Calculator” to see how you can achieve this goal with your employer-sponsored retirement plan. If your employer offers a choice between a traditional plan and a Roth one, also use this retirement calculator: “Traditional 401(k) or Roth 401(k)?”
Our “Save for Retirement” calculator is quite robust and is an excellent tool for this kind of planning. You can enter information about your retirement plans and assets along with some assumptions, including your life expectancy, annual salary increases, inflation rate, and rate of return. Not only will this demonstrate how much you’d save under this plan, but it will also show what you’d need based on the inputs about your anticipated lifespan and spending needs during your retirement years.
Underneath the planned savings and required savings amounts, the calculator will tell you if you’d meet your requirement goal number or if you’d need more. If your employer provides a 401(k) plan, this can be an excellent alternative in your retirement planning toolbox. Use the “401(k) Calculator” to experiment with options. Are you choosing between a traditional or Roth? Use the “Traditional 401(k) or Roth 401(k)?” calculator to explore what’s best for you.
When it comes time to withdraw money from your IRA, post-retirement, you’ll have certain rules to follow. For example, when you reach a certain age, the IRS will require you to take minimum distribution amounts from that point forward. What that amount will be depends upon the balance of funds in your retirement account and your years of life expectancy remaining.
As long as you meet that minimum amount, though, you can withdraw beyond that according to your needs—and the 95% rule is an often-discussed philosophy on how to do that. Each year, you’d calculate 4% of your portfolio value. Then, either withdraw that amount or 95% of what you took out the previous year—whichever is bigger. This allows you to consistently live your lifestyle without significant risk of running out of retirement funds.
Bob Clyatt developed this strategy in a book titled Work Less, Live More and has been tweaked since in various iterations.
If your employer offers both types, then this is a strategy to consider because this is a more diversified, tax-wise approach. When it comes time to withdraw retirement funds—and you have invested in both types—some will be taxable (from the 401(k)), and some will be tax-free: from the Roth 401(k).
You might then decide, for example, to take your minimum required distributions from the traditional plan and pay income taxes on those annual withdrawals. When you want additional funds that year, take them from the Roth 401(k). Because you’ve already paid income tax on the funds you contributed to the Roth in the contribution years themselves, you won’t pay any when you withdraw them during your retirement. So, you could build that brand new deck for enjoyable family cookouts on tax-free funds!
Reducing your marginal income tax bracket during retirement years could come with additional benefits, too: lowering your Medicare premium amounts, the tax rate on your Social Security benefits, and tax deductions based on your taxable income. Each situation is unique, so be sure to have good guidance as you craft these strategies.
Three common types of retirement income include Social Security benefits, pension plans from employers, and retirement accounts such as traditional or Roth IRAs and employer-sponsored 401(k) plans. In addition, there may also be income from non-retirement savings accounts, which can include investments that pay dividends and certificates of deposit and savings account interest.
- Social Security benefits are calculated on income earned during your working years.
- A pension plan is a type of retirement savings typically funded by an employer, based on the employee’s income earned and years of service in the company. Payouts usually start upon retirement; pension funds aren’t as common as they used to be and generally aren’t portable. So, when leaving a job that pays a pension, the money can’t typically be rolled into another account. Employees may be given a lump sum payment when leaving the job with a pension account, or the funds may simply sit there until an employee starts receiving benefits upon retirement.
- The third type of retirement income, IRAs/401(k)s, are ones in which you participate and contribute to—up to the maximum allowable amount as desired. Some years, you may reach that maximum; others, you may not. The main difference between a traditional IRA that SCCU offers and a 401(k) is that the latter is sponsored by an employer and will have some sort of employer matching program. (Note that SCCU also offers IRA CDs.) If you’re able to fund a 401(k) and an IRA, you can do so, and that will help you to more fully realize your retirement savings goals.
“IRA” stands for an “individual retirement account.” You can set one up one at a financial institution like SCCU. IRAs help people save for their retirement needs and wants in tax-friendly ways. Account owners can contribute up to a certain dollar amount each year. Check with the IRS to find out the contribution limit for an IRA.
Roth IRAs may have lesser limits based on the person’s income and filing status. You can withdraw from your IRA without penalty at a certain age. If younger than that age, there is a 10% penalty. When you reach a certain age (depending on that year that happened), you’ll be required to take a minimum distribution that’s based on the balance in the fund and your remaining life expectancy.
Retirement planning is very important—your specifics will be unique to you. Factors include your current age, the age you plan to retire, and how much money you’ll need to live the lifestyle of your choice. What you’ll receive in other income, such as your Social Security benefits and any pension or investment income, will also play a role. Some factors are out of your control, such as the inflation rate in the interim.
To streamline your planning, use our “Save for Retirement” calculator. This robust retirement calculator takes your retirement plans and assets into account while also factoring in your anticipated life expectancy (which will play a significant role into how much your retirement savings will translate into an annual income), expected salary increases, your rate of return, and the inflation rate.
By using this retirement calculator, you can quickly see the results of your savings plan plus what you’ll need for retirement spending. If there’s a gap between what you’ll save and need, you can adjust your plan to fit your situation better.
According to the Social Security Administration (SSA), you need at least 10 working years to qualify for Social Security retirement. The amount you’ll receive in monthly benefits is calculated on the highest wages in a 35-year period. If you work less than 35 years, you’ll receive less than if you’d worked 35 or more years. You can get more information on this topic here. The SSA will adjust those earnings based on changes on average earnings.
The 5-year rule applies to qualifying for and receiving Social Security Disability Insurance—typically referred to as SSDI payments. These payments are hard to qualify for, earmarked for people who cannot work because of conditions expected to continue for more than one year or until death. So, this rule is irrelevant for people who are planning towards and building retirement savings.
First, the earlier you start, the better—because this gives you more time to save and accumulate funds in your retirement accounts. If your employer offers a 401(k), this can be the best way to save because of the employer matching involved. That’s really free money! You can also contribute to an IRA: traditional and Roth ones. Create a plan that helps you to contribute as much as possible up to the annual limits and use our retirement calculators, as appropriate, to formulate your retirement savings strategies. Ready to open an IRA at SCCU? Here are your IRA options!
The information provided by these calculators is intended for illustrative purposes only and is not intended to represent actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.