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How to get a 'Ballpark E$timate' of your retirement needs

Posted by Cheryl Costa  August 26, 2008 10:16 AM

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A lot of the people writing in to this blog want to know how much they need to be saving for retirement. There are a lot of calculators out there that will help you answer that question and I wanted to call your attention to one that I really like. It is called a "Ballpark E$timate" and you can complete it on line or in paper format.

There are a couple of things that I like about this calculator. First, it is very simple to use. Second, it gives you helpful pointers about how to use the calculator. For example, one question asks how much annual income you want in retirement as a percentage of what you currently earn. The instructions suggest you use:

70 to 80 percent if you want to cover all the basics and you will have employer-paid retiree health insurance,

80 to 90 percent if you will be paying Medicare Part B and D premiums and expect to do some traveling while retired, and

100 to 120 percent if you will need to cover all Medicare and health care costs, want a very comfortable retirement lifestyle and need to cover the possibility of long term care.

You can also fine-tune the calculator to account for an average life expectancy or a longer life expectancy. By answering less than 20 questions, you can get a pretty accurate projection of how much you need to be saving. The "answer" is quoted as an annual dollar amount to be saved and as a percentage of your current income. The calculator will also tell you how much of your current income you can replace in retirement if you do not save any additional money.

This calculator has a special version for federal government employees covered by the Civil Service Retirement System (CSRS) and there is also a Spanish version available as well.

This blog is not written or edited by Boston.com or the Boston Globe.
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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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