Smart401k’s Newest Retirement Planning Tool – Retirement Outlook
Did you know that 43% of workers have less than $10,000 saved for retirement; and, only 16% are confident that they will be able to save enough for retirement? I was alarmed when I saw these statistics in the 2010 Retirement Confidence Survey from the Employee Benefit Research Institute (See the full survey here). While the poor economy and the rise in unemployment have helped to contribute to these numbers, the survey really drove home that fact that many people just aren’t doing enough to plan for their retirement.
As alarming as the statistics in the survey are, the one that really stands out to me is that less than half of those surveyed have tried to calculate how much money they will need to cover their spending during retirement. In fact, most investors spend more time each year planning their vacation than planning their retirement. While the reasons behind this statistic vary, I think our CEO, Scott Revare, put it best by saying “Financial calculators tend to be either too simplistic to provide much value, or so sophisticated it takes hours to accumulate the necessary documentation to create an accurate picture.” To help fight this problem and get you back on track towards a successful retirement, Smart401k is proud to announce its newest retirement planning tool, Retirement Outlook.
Retirement Outlook is an easy-to-use tool to help you calculate the progress you are making toward funding your retirement. It uses factors such as your age, income, pension benefits, retirement plan savings and savings from other sources to determine how many years of retirement you are currently on pace to fund. It also allows you to update numbers such as your savings rate and retirement age to show how small changes now can have a huge impact later. And the best part of all, it can be done is less than ten minutes.
When we were creating the Retirement Outlook tool, we wanted to make sure we were providing valuable information to investors without creating too much hassle. One of the biggest issues we hear about with other calculators is that you have to make assumptions on what rate of return you will earn on your investments. With Retirement Outlook, we use the Smart401k investment methodology to provide built-in rates of return, based on your situation, so you don’t have to guess.
To get started with Retirement Outlook sign in to your Smart401k account. Within minutes you’ll have a comprehensive snapshot of your investment situation and an answer on how close you may be to reaching your retirement goal. By taking an active approach in planning for your retirement, you may help put yourself on the right track to reaching the retirement you desire. Also, by looking at different scenarios, you will be better prepared to handle the unexpected variables that might show up along the way.
Because investing is not an exact science, it’s important that you come back and revisit your results on a periodic basis. We recommend reviewing your Retirement Outlook at least once a year to see how you are progressing. If you need help developing your savings goals for your employer-sponsored retirement plan, or are unsure how you should be investing in your plan, contact Smart401k’s team of advisers at 877-627-8401. We can help evaluate your personal situation and make sure you are invested appropriately for the goals you want to achieve.
Joe McCulloch, Investment Adviser
March 22nd, 2010 at 12:58 pm
I’ve had the opportunity to use the Outlook tool. It’s helpful for people trying to determine IF they have X income and Y 401k balance, how much of their 401k $$$ will be needed to fund their retirement lifestyle to a given age. Note this tool ONLY considers funds from your 401k and NOT other assets (stocks, bonds, real estate, etc) income / assets that you may have now or in the future. It’s a good beginning for those planning for retirement but should not be used if you are trying to determine how long your total assets would last.
March 24th, 2010 at 2:02 pm
Rich94061,
Thank you for your feedback on our new Retirement Outlook tool. In regards to your comments, I believe there are a few strategies that can be used to make sure you are getting the most out of the Retirement Outlook.
To make the tool useful, we had to make sure we were including all sources of income and savings into the calculations. These items are handled in the first two steps of the program. During Step 1, we gather data on your current salary and savings. For your savings, we split the information into two separate entries. First, we ask what you currently have saved in your 401(k) and how much you are contributing to this account. The second entry is for all your other savings – this can be other 401(k)’s for you and/or your spouse, IRA’s, annuities, taxable investment accounts, and all other savings earmarked for retirement. You are also asked how much you contribute to these accounts each year.
During Step 2, we look to determine what sources of income you will have during retirement. The first step on this page is entering your expected pension income. Next, you decide whether or not you would like to include Social Security as part of the analysis. If you choose to include it, we use your date of birth and current income to estimate the benefit you will receive based upon your anticipated retirement age. You will also enter in your expected part-time income on this page. This entry can include expected wages, or even rental income you expect to receive.
After you have entered this information, we compute the results based on the amount you wish to spend in retirement. You can then make adjustments to your savings, spending and part-time income to view how making small changes now may have a big impact later.
I invite you to revisit the Retirement Outlook tool to make sure you are taking advantage of all the features of the program. If you still find that it is not working for your individual situation, please feel free to call or e-mail one of our advisers and we would be glad to work with you to find a way to make the tool useful.
Joe McCulloch
Smart401k Adviser