How much is enough for retirement? These free retirement planning calculators will help you estimate how much will be enough. Each calculator is unique in what inputs are required and the type of answers you’ll get in return.

MoneyChimp ‘Simple’ Calulator

The MoneyChimp Calculator is simple and offers a quick snapshot of what your annual retirement income might look like. This is one of my preferred calculators for a rough ballpark figure on where your finances should be. It doesn’t go into depth about social security, vacations, and other more specific items. Overall it’s a great simple to use tool. Visit

MSN Retirement Calculator

MSN’s Calculator is my favorite. It automatically updates every time you enter new information. The numbers change in the results box and the graph redraws itself. It tells you whether you’ll leave your heirs with an inheritance or a load of debt. It also informs you when you’ll run out of money. Because of the flexibility of the tool you can enter a lot of “What if?” questions and have the results instantly. One of the weaknesses of this calculator is that it doesn’t take into account inflation or yearly salary growth. Besides those weaknesses this is a very cool calculator.Visit MSN to try it out

Bloomberg Retirement Calculator
Bloomberg offers a Java based calculator which is very nice if you can get it to work. It never did work on one of my computers but worked flawlessly on another. If you have a temperamental computer this calculator might not work for you. Besides that issue this calculator takes into account inflation and salary growth which is important for your final numbers. Visit Bloomberg

Things that are missing in all the calculators

None of the calculators mention ‘real dollar equivalent’, ‘relative value’, or ‘inflation adjusted’ annual income. $100,000K a year sounds pretty good right now but in the future it might be worth less, a lot less. For example, $100,000 today was only worth $20,000 in 1972 in relative value. If you planned to take home $100,000/year when you retired in 2007 it would only be worth $20,000 in 1972 relatively.

What this means is $100,000 isn’t a $100,000 in the future. 35 years from now what you know as a $100,000 might only buy $20,000 of goods and services in 2043. In other words, 1 dollar in the future might only be worth 0.20 cents in relative terms in the future. So don’t get too excited about a retirement income of $100,000 annually. There’s a good chance it might only be worth $20,000 in the future.

What does this mean for your retirement goals? It means you’ll need more than you think (especially if inflation increases like it has for the last 30 years). The way to find out how much more you’ll need is by using this tool at Take the number for your annual or monthly income from the calculators above and enter it into the ‘Initial Amount’ field. Type ‘2007’ into the ‘Initial Year’ box. Now subtract how many years you have until retirement from the current year and use that in the ‘desired year’ box. Now click ‘calculate’ and see what your money might be worth in 2043. This method isn’t a perfect prediction but it will give you an idea of what a dollar will buy 30 years from now. Visit

Wow. That was depressing. But with compound interest on your side you have a solid chance at reaching your goals. All this means is that you’ll need to start today and invest more than the minimum.

If you have any additional input on retirement calculators please leave a comment.

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When considering a Roth 401(k) vs a Traditional 401(k) you need to do one thing: Find out if your employer offers Roth 401(k) retirement accounts. If they don’t most of this information will be interesting but you can’t take advantage of any of it until your employer makes Roth 401(k)s available.

In should be noted that Roth 401(k)s are coupled with Traditional 401(k)s. The maximum contributions for both combined cannot exceed $15,500 for the year. If you are 50 + an additional $5,000 per year can be contributed to “catch up”.

401K comparison chart
This chart shows 2006 numbers. Add $500 to the limits for 2008 standards.

Roth 401(k)


  • Contributions are made with after tax dollars
  • Contributions and earnings grow tax free. Because the money was already taxed it won’t be taxed when you pull it out.

Employer Match:

Employers match are sent to Traditional 401(k). Roth 401Ks can’t accept employer match money.

Max Contributions:
$15,500 per year. For those that are 50 years old or more can add an additional $5000 yearly.


Qualified distributions can be made after 5 taxable years from the opening the account. In addition, you must have either:

  • turned 59 ½ in age
  • died
  • or became disabled

Nonqualified distributions are subject to income tax on earnings.

Hardship withdrawal guidelines are the same for Roth 401(k) as with Traditional 401(k).

Key advantages:

  • No income restrictions. (Roth 401(k)s are available to everyone making a salary with no max limitations while Roth IRA’s aren’t available to those who make more than $110,000 as an individual.)
  • Higher yearly contribution. $15,500 yearly maximum contributions instead of the Roth IRA minimum of $4,000
  • Earnings grow tax free


  • Not widely available among employers. Due to the extra cost in accounting and book keeping Roth 401(k)’s aren’t being adopted quickly.

Why a Roth 401(k) is the best choice (if available):
Politicians promise lower taxes each election year but somehow taxes have increased inevitably. As much as I’d love to have someone get rid of taxes I don’t think we’re going to reduce taxes anytime soon. Benjamin Franklin said it best “In this world nothing is certain but death and taxes.”

For this reason a Roth 401(k) is usually always the best choice when compared with a traditional 401(k).

The other side of the argument is if your income tax rate is high now but will be low when you retire a traditional 401(k) might be better.
If your income tax rate is low now and will be higher later the Roth 401(k) is better.

Traditional 401(k)


  • are made with pretax dollars
  • are tax deductible
  • are taxed when distributed.
  • No more than $15,500 plus $5000 if over 50 years old

Employer Match:
The maximum is 6% up to a $230,000 salary for a total of $13,800.

59 ½ is the earliest you can receive distributions.

Early withdrawals are subject to -10% penalty plus any taxes.

Minimum Required Distribution (MRD)

Begins the calender year when participant turns 70 ½ or the calendar year they retire. Required distributions may start even if the participant hasn’t retired. It begins April 1 of the year after reaching 70½.

Hardship Withdrawals:
Optional, varies among different plans
These conditions apply to spouse and minor dependents as well.
Some medical expenses
Some costs on the purchase of a primary residence
Tuition and educational expenses
Preventing foreclosure on primary residence
Funeral expenses
Hardship withdrawals are only available if there are no other means to pay these debts. In other words, this is a last resort.

401(k) Loans:

  • 1-2% above prime
  • Interest goes towards 401(K) account
  • Usually only one loan per 12 month period
  • Failure to repay loan could result in 10% penalty plus other taxes
  • If you leave your job, 60 days is a standard repay time
  • Most loans are 5 year loans

Additional Resources:,,id=151926,00.html

This is a summary and should only used for informational purposes only. Always consult a tax expert before making any decisions regarding your own financial plans.

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