We are fortunate to live in an age where there is so much information available…for FREE. You go on the internet and can figure out practically anything. One thing I like to do every now and then is see where I’m at with my retirement plans/funds and project what they may look like at the time I actually retire…like a gazillion years from now 🙂 There are a bunch of free 401k calculators online that can help you with this task with just a few simple inputs. I plan to retire at around 65ish anyway and not super early. This is unlike a lot of other Personal Finance writers whom I’ve read have retired somewhere in their 30s or 40s or are on track to do so somewhere in that age range. I guess for me I like going to work, interacting with my co-workers, the Monday thru Friday routine – most of the times J But who knows, things can always change. In the meantime, it’s nice to see the potential of your nest egg due to the benefits of Dollar-Cost-Averaging and compounded earnings, both of which go hand in hand and as a result of discipline.
So when I googled 401k calculators, apart from Personal Capital (which was 1st on the list and I already have an account with them), the next four were (1) Bankrate, (2) Calculator.net, (3) Nerdwallet, and (4) Moneychimp.
I usually use the calculators on Bank Rate, but figured I should give these other ones a shot to see how easy each one is to use, the amount of information it spits out and hose useful that information may be.
Top 401k Calculators
Bankrate’s 401k Calculator – this one is pretty easy to use. All the inputs are on one screen which includes percent to contribute, annual salary, annual salary increase, current age, age of retirement, current 401k balance, annual rate of return, employer match percentage, and percentage at which employer match ends. Then you click calculate and it simply gives you one number where it estimates your retirement balances will be at the age of retirement and provides a visual graph below the data. For example, if you’re 35 and plan to retire at 65, it will give you the balance in 30 years based on how much you’re are contributing at the moment. You can also switch to another view called View Report and this will show you the visual graph on the top and then below there is a year by year table with your 401k balance as you age with contributions, employer match, balance without employer match, and balance with employer match. Because of the simplicity of the inputs and amount of information it throws out, ease of use and understanding, I give this tool a grade of A!
Calculator.net’s 401k Calculator – this one is quite similar to bankrate. The inputs are all the same and all on one screen. This one also has a life expectancy input. Also, this tool combines your contribution and the employer contribution piece all in one input. After you click the calculate button, it provides a narrative of the results as the top of the screen. As a hypothetical, I provided some inputs and got the following:
“At the retirement age of 65, the 401K balance will be $1,066,981.12. It is equivalent to $379,187.37 now in purchasing power.
If withdraw monthly, you can withdraw $7,644.18 per month after retirement. At 65, it is equivalent to $2,716.62 now in purchasing power. At 85, it is equivalent to $1,504.12 now in purchasing power.
If retrieving annually, you can retrieve $93,024.28 per year after retirement. At 65, it is equivalent to $33,059.28 now in purchasing power. At 85, it is equivalent to $18,304.12 now in purchasing power.
Total contributions: $302,310. Total interests: $1,528,175. Total payouts: $1,860,486.
Wow, that is a lot of information! And it is all at your fingertips. You know how much you’ll have, how much it can actually buy for you, and how long it could possibly last. Again, this tool is pretty easy to use as it provides this information in this narrative fashion as well as a table format like Bank rate. Due to these features, I give this tool a grade of A+!
Nerd wallet’s 401k Calculator – this tool has a screen by screen set-up. The first screen asks how old you are, so you enter that information and click Next. The next screen asks your income before taxes. You enter it then click Next. The third and final screen asks your current 401k account balance. Then you click Done and are presented with a graph that’s your balance at retirement. When I entered this data, it already assumed certain information. This includes monthly contributions of 10%, employer match of 100%, limit on employer match of 2%, retirement age of 67, and rate of return of 6%. You can tweak these numbers on the final screen, but I’d rather just enter them myself all in the beginning. Also one thing I didn’t like in the monthly contributions input is that it didn’t allow me to go over the $18,000 limit. But what if I have a Traditional IRA as well? Additionally, there is an advance feature where you can enter your life expectancy, catch-up contributions and 401k fees. It allows you to provide similar inputs, but at various stages. Also there isn’t a year after year table which is nice to see in order to assess when and how you should make adjustments to contributions. Therefore, I give this tool a grade of B-.
Money chimp’s 401k Calculator – this tool is called a Simple Retirement Calculator. And it truly is simple as it has 5 inputs: current 401k balance, annual contribution, employer’s matching contribution, years to retirement, and investment return rate. The output is the balance at retirement (your total nest egg). Then there’s another small table below where you can get the number of years you want your nest egg to last how much you can receive after taxes; all great stuff. But I wanted more information like a chart/visual to show the growth of your fund over the years as well as purchasing power based on today’s dollars. Since the simplicity factor is obviously there, but the lack of comprehensive information isn’t, I’m giving this tool a grade of a B.
And the winner is Calculator.net with a grade of A+. This tool summarizes and charts information very nicely and all one screen! It’s no wonder it’s ranked #2 when I did my Google search of retirement calculators.
So do you have a go to 401k calculator? If so what do you like about it? Do you have your own way of calculating your retirement nest egg and income?
I use Personal Capital because (1) it’s free, (2) it tracks all of my accounts and overall net worth, (3) my account balances automatically update, (4) it shows how my investments are diversified and allocated in various sectors, and (5) can use built-in tools like “Investment Checkup” to get….wait for it…free personalized advice!