Many people are unaware whether they’re investing enough to achieve their ideal post-retirement income. With inflation and other variables always impacting on the decisions we make for tomorrow, today, even the best laid plans can go awry. So what do you do? A pension calculator can help to shed some light on these variables, and eliminate some of the guesswork of saving for your retirement.
A pension calculator can help you calculate if you’re saving enough for your retirement. It’s true that, once you retire, you’ll require less income than you had while you were still working. This is based on the assumption that some of your expenses, such as travelling to work, effectively falls away. What’s more, you will be required to pay less tax after turning 65, and even less after 75.
Depending on your eventual retirement plans, you’ll require about 60{0eed6e6c753d3bcba73eb53e6229efd99942d479bf142a0b5c34fcde84dd2439} of your final pre-tax salary once you retire. A pension calculator is only fit for an estimate, and is not a replacement for sound financial advice that takes your personal circumstances into account.
So How Does a Pension Calculator Work?
Pension calculators are designed to take variables into account, such as your expected retirement age, employer and employee pension contribution, and expected annual salary increase. It also takes into account expected annual growth in value of savings, and the pensionable percentage of salary, along with the expected annual inflation rate.
These are only a few of the variables and assumptions that can make it difficult for the average employee to accurately figure out whether he or she is saving enough for retirement age. For a sound initial analysis of your current retirement savings plans, turn to a pension calculator to help you determine whether you are set up for success.
