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Online retirement calculators come in all shapes and sizes. Some retirement calculators are extremely simple and provide little in the way of helpful information you can use to plan for retirement. Others are complex affairs that require an advanced degree from MIT to use. What follows are 11 online calculators for retirement that get it just right. They are easy to use, provide a lot of useful information, and best of all, are free.

IRA Calculator

Morningstar’s IRA Calculator is a nifty 3-in-1 calculator if you have or are considering opening an IRA. First, the calculator will tell you whether you qualify for a Roth IRA, a deductible IRA, or a nondeductible IRA. Second, based on how much you plan to save in an IRA, the IRA calculator will tell you how much you’ll have at retirement in each type of IRA. This is a helpful way to assess which IRA is best for you. And third, the calculator will help you determine whether to roll over an IRA into a Roth IRA. So if you have or are considering an IRA, this is definitely a tool to bookmark.

Online Retirement Plans

Boulevard R offers a unique approach to retirement planning. Unlike most retirement calculators, Boulevard R asks how you want to spend your time in retirement, and uses your answers as part of its analysis. It also offers a very easy user interface and very nice charts and graphics to show you where you stand. At the end it calculates what it calls a Retirement Security Index score.

CNNMoney’s Retirement Planner is like creating an online financial plan. The great thing about this tool is that it’s very easy to follow and takes just a couple of minutes to input your data and see the results. The retirement planner accommodates data for both couples and singles, allows you to estimate retirement needs in dollars or as a percentage of current income, and factors in social security benefits (which it estimates based on your income). The results include an estimate of the likelihood your nest egg will grow to meet your needs. In our case, the calculator concluded that we need to earn 9.3% on average to meet our retirement goals, which it assessed at an 82% chance of success.

Fidelity’s MyPlan Retirement Quick Check is a more detailed retirement planner that uses Monte Carlo simulation to estimate how much money you will have during retirement. Monte Carlo is a mathematical model that recognizes that the stock market doesn’t produce the same rate of return each year. One year it could be up 25%, the next it could be down 15%. And this is an extremely important consideration for new retirees. If the market drops 20% in your first year of retirement, the loss can increase the odds you’ll outlive your money. Monte Carlo simulation looks at thousands of possible market returns over a period of time, and produces a range of results with the likelihood you’ll achieve your goals. Fidelity’s Retirement Quick Check is available to Fidelity clients or those that register with Fidelity.

And if you want to understand Monte Carlo retirement calculators better, check out The Retirement Calculator from Hell by William Bernstein.

Retirement Income Calculators

T. Rowe Price’s Retirement Income Calculator also uses a Monte Carlo simulation to estimate the likelihood your retirement savings will be enough. The interesting feature of this calculator is that you choose the confidence level that your money will be enough in retirement. In other words, you can select 99% for example, which means the calculator will assess whether your savings at retirement has a 99% chance of providing sufficient income for you during retirement. One limitation of the calculator is that you must input how much you’ll have at retirement, but the other calculators discussed here can handle that with no problem.

Fidelity’s MyPlan Snapshot is a nifty online tool to help determine how much you need to save to meet your retirement goals. The tool asks your age, income, investment style, monthly contributions to retirement accounts, and retirement savings. Based on this data, it then calculates how much you need at retirement (it assumes 85% of current income) and how much you’ll have if the market performs poorly or as it has in the past. You can then adjust the age at which you’ll retire, your monthly contribution amount, or investment style to see how these decisions may impact your nest egg at retirement.

Other Online Retirement Calculators

There are literally thousands of retirement calculators available online. The calculators described above should cover most DIY retirement planning needs. But here are few more to check out if you’re looking for other options:

• Dinkytown’s Retirement Shortfall calculator
• Bloomberg’s Retirement Plan
• Yahoo’s How Much to Save for Retirement calculator
• AARP’s Retirement Calculator
• Nationwide’s RetirAbility Check

Photo Credit: Wolfgang Staudt

News and Analysis

• Are payday loans actually good for us? An Experimental Analysis of the Demand for Payday Loans (45 page pdf file) written by a team of researchers from George Mason University takes an eye-opening perspective on the subject:

Abstract: The payday loan industry is one of the fastest growing segments of the consumer financial services market in the United States. The purpose of our study is to design an environment similar to the one that payday loan customers face. We then conduct a laboratory experiment to examine what effect, if any, the existence of payday loans has on individuals’ abilities to manage and to survive financial setbacks. Our primary objective is to examine whether access to payday loans improves or worsens the likelihood of financial survival in our experiment. We also test the degree to which people’s use of payday loans affects their ability to survive financially. We find that payday loans help the subjects to absorb expenditure shocks and, therefore, survive financially. However, subjects whose demand for payday loans exceeds a certain threshold level are at a greater risk than a corresponding subject in the treatment in which payday loans do not exist.

• Experian files lawsuit against LifeLock

Experian, one of the big three credit bureaus, sued LifeLock in the U.S. District Court for the Central District of California. LifeLock is a company that promises, for a fee, to guard you against identity theft. One of the things it does to accomplish this is to place a fraud alert on your credit files every 90 days. Experian claims this constitutes false and misleading advertising and fraud, presumably because fraud alerts were intended to protect consumers who believed their identity had been stolen, not to protect against future possible identity theft.

• Selected Major Indexes

This article lists the returns of some of the world’s major indexes.


• HomeSaver Advance

Fannie Mae recently announced a new program to assist at-risk borrowers with refinancing and loan workout assistance. “HomeSaver Advance is designed to help qualified borrowers bring delinquent mortgages current and keep their homes. With HomeSaver Advance, servicers can now offer an unsecured, personal loan that will enable a qualified borrower to cure the payment default on a mortgage loan that Fannie Mae owns or has securitized, with fewer up-front costs and generally in less time.” Loans are for 15 years a 5%, with a 6 month no interest/no payment period. You can download a pdf version of Fannie Mae’s HomeSaver Advance Fact Sheet

Smart Spending

• Little Steps: 100 Great Tips For Saving Money For Those Just Getting Started

A great list of ways to save money from The Simple Dollar.

• 50+ Frugal Tips, Ideas, and Resources

This is a list of lists from Moolanomy! Fifty-two links to articles with ideas on how spend your money wisely. Some of the great ways to save money include:

• 101 frugal Christmas present ideas;
• What is Frugality and Are We Frugal?;
• 30 Frugal Gift Ideas to Show You Appreciate Someone;
• Ultimate Frugality - The Best Free Software For Windows; and
• 75 Frugal Hacks for Your Home.
• 21 Money-Saving Sites from Around the Web

This article from Get Rich Slowly includes links to sites that can help you save money, such as Fat Wallet:



eBooks and Articles

• Census Atlas of the United States

If a picture is worth a thousand words, then the U.S. Census Bureau’s new Census Atlas of the United States speaks volumes about how the nation’s population and housing characteristics have changed over the years. The atlas, with more than 700 full-color maps, is the first general population and housing statistical atlas published by the Census Bureau since 1925.


• The 13 Most Overlooked Tax Deductions

“Years ago, the head of the IRS told Kiplinger’s Personal Finance magazine that he figured millions of taxpayers overpaid their taxes every year by overlooking just one of the money-savers listed [in the article]. Claim them if you deserve them … and cut your tax bill to the bone.”

• Taking the Mystery Out of Retirement

This publication by the U.S. Department of Labor is a step by step plan to retirement. It includes interactive worksheets that cover such topics as current assets and savings, projected asset and savings, and expenses in retirement. You can also download the fully illustrated 62-page Adobe PDF narrative.

• The Economic Mobility Project (1 MB pdf file)
  Download the key findings (200 KB pdf file)

The Economic Mobility report , “authored by a team of scholars at the Brookings Institution, is one in a series of major research products that aims to further enlighten the public dialogue on economic opportunity. While it offers reassuring findings in some areas, in many others there is room for concern. By arming the public and policy makers with facts about the status of opportunity in America today, this volume seeks to stimulate and frame the debate about which policies are likely to be most effective in ensuring that the American Dream endures for the next century.”

• Dave Ramsey’s Baby Steps

The M-Network did a series on Dave Ramsey’s 7 Baby Steps to Financial Freedom.

• The Real Cost of Homeownership

Here are a couple of additional costs that need to be considered when taking the leap from being a renter to being a homeowner.

• Are Traditional Indexes the Best Benchmarks?

This article looks at traditional indexes, including the S&P 500, and considers whether they remain a relevant benchmark against which to compare investment returns.

• The 5 Year Stock Market Rule

Don’t invest in the stock market unless you’re going in for 5 years.

• Will Divorce Sink the Retirement Ship?

Divorce is painful, emotional, financial and otherwise. I now that having lived through two divorces by the time I was 12. This article looks at some of the financial issues that arise during a divorce.

• To Roth or not to Roth 401(k)

“Let’s start with one basic but often misunderstood fact. Although they’re effectively mirror images of each other -with a regular 401(k) you invest pre-tax dollars and pay taxes at withdrawal, while with a Roth 401(k) you invest after-tax dollars and pay no tax at the end -in a pure economic sense there’s really no difference between the two.”

Cool Tools and Resources

• 
  Death and Taxes 2008 Online Poster

Do you want to know how your tax dollars are being spent? This massive online poster tells all.


• Voyant’s @Home financial planning tool

Voyant @Home helps people understand the big-picture impact of life-changing events and their long-term financial implications - from the birth of a child to the early retirement of a spouse.


• Does dollar cost averaging really work? Check out this online dollar cost averaging calculator and find out for yourself.
• The Investor Awareness Index

“The Investor Awareness Index is the only resource that rates the comprehensiveness & effectiveness of a company’s initiatives to generate awareness for its stock within the investment community. The 0-10 rating scale is designed to assist in the investment research process by providing investors with unique insight into a critical element for a successful investment: understanding if a company is doing the right things to generate broad awareness among investors, portfolio managers, and stock analysts.”

• Mortgage Marvel: A tool to help you compare mortgage rates
• Google Sites: “Google Sites is the easiest way to make information accessible to people who need quick, up-to-date access. People can work together on a Site to add file attachments, information from other Google applications (like Google Docs, Google Calendar, YouTube and Picasa), and new free-form content.”
• The Life Cycle of a Blog Post


It’s interactive, so make sure to click through if you want to check it out.

Source: Cool Infographics

• The cost of gasoline:


Source: The Price of Gasoline

• Boulevard R

An online financial planning tool. Here’s a Youtube video describing the tool

• The Finwikian: Your Two Cents on Personal Finance — a new personal finance wiki)

A community has grown up around personal finance blogs. As a librarian-type, I felt compelled to organize it into a useful resource. Obviously, no one site will ever capture the multiplicity of viewpoints and experiences found in the individual sites. However, I hope that this one will be valuable for bloggers and for those looking for information.

For example, each blog page links to tables of blogs—such as Personal Finance Bloggers, Tax Bloggers, or Frugality Bloggers. These tables allow you to discover other blogs with similar interests, to learn a little bit about them by visiting their Finwikian pages and then to visit the blogs themselves if you’re interested.

That makes it an excellent tool for writers and readers, you can share your blog with others, you can contribute to pages on other blogs you read, and hopefully you will discover new blogs in the process.

There will be a number of pages on various topics from Dave Ramsey and his Debt Snowball to Credit Card Arbitrage and Peer To Peer Lending. I can’t create them alone; I hope that the personal finance community will join together in making this not just one person’s site and idea, but our site full of our ideas.

I thought I’d end this Best of with a Lending Club commercial I found on YouTube. This goes back to the days when Lending Club was on Facebook only. Trust me, they’ve come a long way. . .

Since publishing The Ultimate Guide to Traditional and Roth 401(k) and IRA Retirement Accounts, I’ve received a number of questions about retirement plans that weren’t covered in the article. I’ve responded to these questions in the comments to the article, but I thought it would be helpful to discuss some of them in a separate article. So here are some of your questions, along with my responses. I’ll add this information to The Ultimate Guide so that everything is in one place.

James asked whether he can put a full $15,500 into his 401(k) and then contribute an additional $4,000 in a Roth IRA in the same tax year?

Yes. Assuming that your income qualifies you for a Roth IRA (see The Ultimate Guide), then you can contribute to both a 401k and a Roth IRA.

Ben asked who monitors his contribution limits if he changes jobs during the year and what happens if his contributions from both jobs combined exceed the $15,500 limit.

The IRS makes clear that you are responsible for making sure your contributions to multiple plans do no exceed the limits. When I changed jobs a few years ago, I notified my new employer of the amount I had already contributed that year, and they then stopped my contributions when I reached the limit. If you go over, you have until tax day of the following year to remove the excess and any earnings generated from the excess. If you don’t remove the excess, you’re taxed on the amount AND you’re taxed on it again when you eventually withdraw it. On top of that, the excess contribution can disqualify the plan.

Snoop911 asked what happens if you contribute to a Roth IRA on January 1, but then later in the year, it turns out you make over the limit for Roth IRA eligibility.

As I told Snoop911, did you ever wonder why you have until tax day of the next year to make an IRA contribution? However, if you do contribute earlier and then make too much to qualify for a Roth IRA, you have to get your money out before the due date (including extensions) for filing your tax return for the year. You must also withdraw any earnings attributed to the excess contribution. And if you don’t get the money out in time? 6% excise tax! IRS Publication 590 (pdf) has more details.

Snoop911 also asked about the contribution limits to a Roth IRA.

As with a traditional IRA, the 2007 limits are $4,000 if you are 49 or younger, and $5,000 if you are 50 or better (ok, 50 or older, but as I get closer to 50, I prefer better)

There were some other great questions, so I’ll update The Ultimate Guide shortly and will let you know when the updates have been added. And as a reminder, the rules and regulations for retirement accounts can be tricky, and I’m not a retirement account or tax specialist. So you should always consult your plan administrator or other specialist before making any decisions.

A reader recently brought a website to my attention and asked what I thought of it as a money management tool. The site is called PriceAmbush, and it purports to allow you to search the Internet for the best deals on stuff. But I have very mixed feelings about this site. First, it appears to find deals only through Amazon.com, at least based on the searches I ran. While this is not a problem, per se, the site doesn’t disclose this fact (at least that I could see). Second, because Amazon’s prices on products can change by the minute as can availability of product, I found PriceAmbush’s product availability and pricing information to be inaccurate on several occasions. There are, however, two features about the site that make PriceAmbush worth considering.

Read the rest

My daughter turned 13 this past week, and we’re celebrating with family today. I look at pictures from just five years ago, and it’s amazing how much she’s grown and matured. And it reminds me of a decision I made at that time to leave a high paying, prestigious job for a lower paying and very ordinary job so that I could spend more time with my family. Please don’t think me a “hero” for making this decision as my wife had as much to do with it as I. It was the hardest yet most satisfying career move I’ve ever made. And because of that decision, I’ve had the honor and pleasure of watching my daughter grow up these past five years, rather than spending that time working 75 hours a week and traveling much of the time. As a great poet once wrote, I took the road less traveled by, and that has made all the difference:

But enough of my ramblings, here are some great articles of the past week that I think you’ll enjoy:

1. 10 Reasons To Avoid Lists (@ The Financial Philosopher)
2. Mandatory PF Courses in Ohio (@ Grad Money Matters): Go Buckeyes!
3. It’s Raining Money (@ Single Guy Money): Ebates was knew to me, so I thought I’d pass it along to you.
4. Force Yourself To Save! 15 Painless Ways To Pay Yourself First (@ The Digerati Life): I like saving, and I like painless.
5. How To Protect Your Personal Data When Disaster Strikes (@ Gather Little By Little)
6. The Dough Roller Retro: Don’t Steal From St. Peter