Salary - Enter your current annual salary or annual wages here. If you are
married enter the sum of both of your salaries.
Contribution Percentage - Enter a
percentage between 1% and 15% that represents the percentage of your income that you wish
to withold into your 401(k) account. The witholding may not exceed 15%. Also, a person
cannot contribute more than $9,500 to a 401(k) account in any year, so adjust this
percentage to make sure that the total annual witholding does not exceed $9,500. If you
are married, you can both save up to $9,500 for a potential total of $19,000.
Match Percentage - If your company matches your contributions, enter the matching
percentage it uses (for example, if your company matches 3% of your salary, enter 3 here).
If your company does not match, enter zero.
Pre-retirement
Interest Rate - Enter the interest rate you expect to
earn on your 401(k) account prior to retirement. To give you two ideas, current CD rates
run between 5% and 6%, while the stock market has returned an average of 10% or so for
many years. For 6%, enter 6 in the entry field. Typically you would invest more
agressively prior to retirement and then move the money to less-risky investments after
retiring.
Post-retirement
Interest Rate - Enter the interest rate you expect to
earn once you retire. See the previous field for an explanation. You might enter 10 in the
previous field and 6 here, for example.
Inflation Rate - Enter the expected inflation rate during the coming years. 4% is a good
average number for the past ten years and would work well here. If you are more
pessimistic, choose a higher number.
Salary Increase
Rate - Presumably your salary will rise over the years.
It should, at a minimum, rise with the inflation rate in the form of cost-of-living
increases. It may rise faster than that depending on the job you hold. Enter the rate at
which you expect your salary or wages to increase. If you are unsure, enter the inflation
rate from the previous field here.
Current 401(k)
Value - Enter the current value of any 401(k) accounts
you have now.
Current Age - Enter your current age.
Expected
Retirement Age -
Enter the age at which you plan to retire. 65 is normal, but you might want to consider
early retirement options.
Desired
Retirement Income - Enter the amount of money you would
like to have to spend each year during retirement, in today's dollars . For example,
if you look at yourself and say, "If I were to retire today, I would feel comfortable
if I had $30,000 per year to spend" then enter $30,000 here. Remember that you will
have to pay taxes on that amount just like you do today, so take that fact into account. A
good ballpark figure recommended by many financial experts is 80% of what you currently
make per year. Therefore if your salary is $30,000 now and you feel comfortable with that
amount, you could enter $30,000 * 80% = $24,000 in this field.
Click the
calculate button to see your retirement outlook
401(k)
Contribution - This field shows how much money you are
contributing to your 401(k) account per year given the contribution percentage you entered
above. If this value exceeds $9,500, adjust the percentage you entered.
Matching
Contribution - This field shows how much money your
employer is contributing to your 401(k) account based on the matching percentage you
entered above.
401(k) Account
Value at Retirement - This will be the total value of
your 401(k) account when you retire.
Year Value
1 year value - This is the total value of your 401(k) account at the end of your first
year in retirement.
2 year value - This is the total value of your 401(k) account after two years in
retirement.
3 year value - And so on...
4
year value
5 year value
10 year value
15 year value
20 year value
30
year value
40 year value
