Retirement

Voya’s Retirement Calculator

As part of our retirement planning series, we’re reviewing various online retirement calculators.

TODAY’S FOCUS: Voya Financial’s MyOrangeMoney Retirement Calculator

Key statistics:

  1. # of Questions: 5 Total Questions
    • “How old are you?”
    • “What’s your annual income?”
    • “How much have you saved for retirement so far?”
    • “How much are you saving per month today?”
    • “How much future income are you expecting from other sources?”
  2. Results: 3 Key Numbers
    • “Estimated monthly income”
    • “Estimated monthly goal”
    • “A difference of”

Thoughts regarding this calculator:

  1. Ease of use: 1  (1: Easy | 5: Challenging | 10: Very Difficult)
  2. Scenario Analysis Excellent. User is able to easily make adjustments to the initial data points using simple sliders and clicks.
  3. Conservative Calculation This calculator is fairly conservative. It assumes the following:
    • Retirement Income: 70% of working income. This might be a little low. Many calculators use 80% as their working assumption.
    • Rate of Return: 5% growth rate is the default. You can adjust this rate up or down using a simple slider.
    • Inflation Rate: This calculator uses 3% inflation rate. This is conservative relative to the more recent past.
  4. Spouse not included The user must combine incomes and investments savings in order to calculate their overall progress toward retirement. While this might seem intuitive for some people, it is not readily obvious.

OVERALL RATING: 4 (out of 5)

How Much Money Do You Need To Retire Well?

“How much money do you need to retire well?”

This is an important question we should all be able to answer. If we don’t know, it is impossible to measure our progress.

There are several excellent retirement calculators that can help you determine two key facts:

  1. Current Status Where do you stand right now? Using just a few key pieces of information, these calculators can help you understand whether or not you are on track for your preferred retirement lifestyle.
  2. Necessary Adjustments  Most of these calculators offer suggestions for improvement. Maybe you need to increase your monthly contributions. Perhaps you need to consider working a few extra years. Maybe you are actually ahead of plan and can scale back on your investments!

Here are some good retirement calculators to explore:

  1. Voya Financial’s MyOrangeMoney Retirement Calculator
  2. Fidelity’s Fidelity Retirement Score Calculator
  3. Vanguard’s Retirement Income Calculator
  4. Transamerica’s Retirement Calculator
  5. AARP’s Retirement Calculator
  6. BlackRock’s CoRI – Retirement Calculator
  7. MarketWatch’s Retirement Planner
  8. I Was Broke. Now I’m Not.’s Retirement Nest-Egg Calculator

Take a few minutes and browse through a couple of these calculators. You’ll be on your way to positioning yourself for an excellent retirement!

Preparing for Retirement Income

We were recently asked this question, “I’m a few years out from retirement. What are some things I should be considering?”

It was a great question, and one that applies to all of us. With that in mind, we decided to share our answer with everyone.

As you prepare for your retirement, I encourage you to do the following:

  1. OUTGO:  Calculate your “needed” and “desired” retirement income
    • “Needed” income is what is absolutely necessary to maintain your life – giving, saving for known, upcoming non-monthly expenses (Christmas, vacations, property taxes, car maintenance/replacement, homeowner’s association fees, insurance deductibles, etc), food, car insurance, etc.
    • “Desired” income is what you would like to have in monthly income – it covers your “needed” income plus the extras you would like to be able to do throughout retirement
  2. INCOME:  Visit SSA.gov to determine your options
    • Upon establishment of your personal account, you will be able to see all of the available options including early retirement, full retirement, and delaying benefits until sometime past full retirement age.
  3. INCOME:  Determine other sources of income you expect to receive throughout retirement
    • Do you have any pensions?
    • Do you have any rental income sources?
    • Do you have any 401k, 403b, 457, TSP, Roth IRA, IRA, or other similar investments?
    • Do you have any assets (property, precious metals, business interest) you expect to sell to help fund retirement?
  4. Calculate your retirement nest-egg from multiple sources

It’s NEVER too early to start thinking about and planning for those retirement years!

You Can Still Fund Your 2013 Retirement Savings Plan

Even though 2013 is over, you can still make contributions to your Retirement Savings Plan through the deadline for filing 2013 Federal Income Tax Returns – April 15, 2014!

  • If you are under 50 years of age, you are allowed to contribute $5,500
  • If you are 50 or over, you are allowed the so-called “catch-up” additional $1,000 – making your maximum contribution $6,500

A contribution can be made to either a Roth IRA (invest after-tax money and withdraw tax-free later) or a Traditional IRA (invest before-tax money and pay taxes upon withdrawal later). I’m a big fan of the Roth IRA because it allows me to receive tax advantages on more dollars. I also believe that tax rates will continue to increase in the future so I would rather pay the taxes today.

Ways You Can Fund Your 2013 Retirement Savings Plan:

  1. Use your tax refund. Chances are pretty good that you would spend this on something that would decrease rapidly in value or have no value at all (vacation, vehicle, TV, computer, etc). Instead of making all of the money disappear, use a portion of it to fund your retirement!
  2. Use a bonus.  Many people receive quarterly bonuses. Use the March bonus to fund your 2013 Roth IRA.
  3. Sell something.  Sell the boat that sits in the yard, the motorcycle that never gets used, or the broken jewelry.
  4. Work overtime.  Work overtime for the next few months and place the majority of the extra income into your 2013 Roth IRA. Plus you will get the added benefit of paying extra Social Security payments so you will receive $3/month extra throughout retirement.

Contributions to individual retirement savings plans are subject to certain income guidelines. You must have earned income equivalent to at least the amount you contribute to your retirement account. Additionally, eligibility is reduced as one’s income increases. The IRS provides additional guidance HERE.

NOTE: This post was written as part of the “Retirement” series here at the wildly popular JosephSangl.com! Click HERE to access all previous tips in this series.

5 Reasons You Should Make Retirement Saving A Top Priority

Statistics routinely show that most people delay saving for retirement far too late. In fact, many do not begin saving until they are 10 or 15 years away from retirement!

Here are 5 key reasons you should make retirement savings a top priority:
  1. You will be tired. That’s why it’s called “retirement.” Seriously, you won’t have the same level of energy at 75 as you had at 35. And many people live far beyond 75 years of age!
  2. Compound interest. Compound interest helps you carry the financial burden. It is what allows an investment of $100 per month for 40 years to equal $1,176,477. However, TIME and CONSISTENCY matter most. That’s why it is so very important to start early and often!
  3. You won’t financially burden your children. You won’t believe the number of people I’ve met who are having to take care of their aging parents – not healthcare-wise, but financially! And as family, we all want to help however we can, but it is robbing many of these families of the ability to save for their own retirement. Many times, it leads to a repeat situation when the children retire!
  4. It’s a sign of wisdom. You KNOW you need to save for retirement. It seems like 20-percent of TV commercials are related to investing! To ignore the obvious is a sign of laziness. Using the slogan made famous by Nike: Just Do It!
  5. You just got 5 minutes older reading this article! Yesterday is gone. Tomorrow is the future. That’s why today is called The Present! Use the gift of TODAY to start your retirement savings account – or kick your existing one into a higher gear!

NOTE: This post was written as part of the “Retirement” series here at the wildly popular JosephSangl.com! Click HERE to access all previous tips in this series.