Retirement Shortfall

One of the biggest risks to a comfortable retirement is running out of money too soon. This calculator helps you determine your projected shortfall or surplus at retirement based on the assumptions given. You can also see just how long your current retirement savings will last. If your results project a shortfall, you might need to save more, earn a better rate of return, or possibly delay your retirement. Please note the results of this tool do not constitute investment advice, and should not be solely relied upon when making investment decisions. You should consult an investment professional to determine which products or strategies may be appropriate for you.

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Definitions

Current retirement savings: This is your current retirement savings. You should include any savings or investments that are specifically for your retirement. Be careful not to include amounts earmarked for other purposes, such as your children's education.
Monthly contributions: The amount you will contribute each month to your retirement savings. This calculator assumes that you make your contribution at the beginning of each month. We also assume that this amount remains constant until you retire. Your contributions should be the total you save toward your retirement each month. This should include any 403(b), 401(k), or 457(b) plans and your employer contributions to these plans. It should also include any other retirement accounts such as an IRA or a Roth IRA and any retirement savings in non-retirement accounts.
Years before you retire: The number of years you have to save before your retirement. If you are planning on retiring immediately, you should enter a zero.
Number of years in retirement: The number of years you expect to spend in retirement. If this retirement savings plan is intended to support you and your spouse, make sure this is long enough years to account for your spouse's potentially longer lifespan.
Annual retirement expenses: Your after tax retirement expenses. Since this calculator assumes that you will be paying income taxes on interest as it is earned, your expenses should be entered on an after tax basis. Your retirement expenses are increased each year by your expected inflation rate if the "Increase expenses with inflation" box is checked.
Expected inflation rate: What you expect for the average long-term inflation rate.
Rate of return before retirement: This is the annual rate of return you expect from your investments before taxes. The actual rate of return is largely dependant on the type of investments you select. The assumed rates of return do not predict the results of any particular investments. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Rate of return during retirement: This is the annually compounded rate of return you expect from your investments during retirement. It is often lower than the return earned before retirement due to more conservative investment choices to help insure a steady flow of income. The actual rate of return is largely dependant on the type of investments you select. The assumed rates of return do not predict the results of any particular investments. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment.
Federal tax rate: Your marginal federal tax rate.
State tax rate: Your marginal state tax rate.

Disclaimer

This calculator includes content that Genworth Financial did not write or compile. Any assumptions or opinions expressed or embodied in this item are solely those of the creator of the calculator. We do not guarantee how accurate or complete it is. The author did not create this calculator to provide investment, legal, or tax advice and we are not furnishing it to you for any such purpose; you may not use it to avoid any IRS penalty. You should ask your independent tax and legal advisors for that advice based on your particular circumstances.

If this material states or implies that it was prepared or distributed to promote, market or recommend an investment plan or arrangement within the meaning of IRS guidance, or such use may be reasonably expected, then, as required by the IRS, the following also applies:

The tax information in this material was written to support the promotion or marketing of the transaction(s) or matter(s) addressed in this material.

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