Current Annual Income ($):   Enter your current gross annual income.
 
Desired Post-Retirement Income (%):
(As % of Current Income)
   Enter the percentage of your current income that you think you will need in retirement. We call this your "retirement replacement ratio" (RRR). For most people, a minimum 75% RRR is probably a good target. However, circumstances and goals vary. Here are general guidelines to help you if you feel a 75% RRR is not a good fit for you:

  • Minimum (50% to 60%): Meets the government's minimum level of financial adequacy (defined as one-half of pre-retirement income).
  • Basic (70% to 80%): Allows for the basics in retirement, particularly if you have employer-paid retiree health insurance. Plan for a retirement with limited money availalble for travel or luxuries.
  • Moderate (80% to 90%): May be required if you will have to pay your own Medicare premiums and/or pay for insurance to cover costs above Medicare.
  • Comfortable (90% to 120%): Level needed if you strive for a retirement lifestyle more comfortable than your current lifestyle.
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    Assumed Long-term Inflation Rate (%):   Enter the percent you feel that inflation will rise on average during your retirement. Since 1913, statistics show an annual average inflation rate of 3.3%. Since 1972, the inflation rate has ran at a 4.78% annual clip. A 2.5% to 5% inflation rate is reasonable.
     
    Average Annual Decrease in Spending (%):      
        Ages 65-74:   National Average: 2.5%
        Ages 75+:   National Average: 2.8%
     
    Current Age:   Enter your current age rounded up to the next whole year.
     
    Desired Retirement Age:   Enter your desired retirement age rounded to the nearest whole year.
     
    Life Expectancy:   Enter the age you expect to live to. Northwestern Mutual offers an excellent interactive calculator to help you assess longevity based on health, family history, and many other variables.
     
    Expected Annual Pension ($):   If you're lucky enough to be vested in a company-provided pension, enter the yearly amount you expect to receive during retirement. Contact your company's benefit office for this information.
     
    Expected Social Security Benefit ($):   Enter the yearly amount you expect to receive from social security during retirement. The social security office sends you a benefit statement each year near your birthday with more precise benefit information. Use this if available. Or, you can request an up to date statement here. Otherwise, use these very general guidelines:

  • If you make under $25,000, enter $8,000
  • If you make between $25,000 - $40,000, enter $12,000
  • If you make over $40,000, enter $14,500
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    Age Social Security Begins (Min 62):   Enter the age at which you expect to start receiving social security benefits. Full benefits are available at ages 65-67 (depending on birthdate) and reduced benefits are available at 62.
     
    Assumed Investment Return (%):   Enter the average annual long-term investment return you expect to earn on retirement savings. The lower the rate, the more you'll need to save to meet retirement goals. The default is 7%.