What is a retirement calculator?
A retirement calculator can help you ascertain how much money you will have during your retirement - and therefore can help you to ensure that you are saving correctly now. With financial planning being such an important part of preparing for the future, a retirement calculator can assist you in making sure your future is what you hope it will be.
By looking at your current age, savings and salary, as well as the age you will be when you retire, a retirement calculator - also known as a pensions calculator - can paint you an accurate picture of what your funds could look like during your retirement years.
Over the coming years, the retirement age is set to change several times for both men and women, so using a retirement calculator is an important step in ascertaining your future financial position.
How can a retirement calculator help me?
A retirement calculator can help you successfully plan for your future by giving you a projection of your pension funds. From this you can make adjustments to your current savings plan to help give you the future you desire.
By switching the amount you save at the moment, for example, you could increase the amount of pension you will receive when you decide to stop working.
Meanwhile, findings from your retirement calculator may encourage you to move your pension fund or savings elsewhere in order to receive higher returns.
A retirement calculator could also alert you to any potential problems with your pension. For example, should you discover that you are unable to reach your target amount due to other financial commitments such as mortgages, you may wish to invest in alternative routes to boost your pension funds.
What options can help me increase my retirement calculator findings?
Should your retirement calculator findings encourage you to seek alternative means of increasing your retirement funds there are several options available to you.
Choosing to work past your retirement age can increase your income in several ways. Firstly, you could choose to delay claiming your pension and continue contributing to it from either full-time or part-time work. Because you would not be paying national insurance, you have the potential to save more - and therefore boost the funds shown by your retirement calculator.
Alternatively, you could choose to continue working while drawing your pension at the same time, which could perhaps be the option for you if you opt for part-time work.
You could also decide to start a stakeholder or personal pension, which will help boost your predicted retirement calculator funds with government contributions. With such pensions, the government will provide tax relief for the amount you add to the account.
Retirement calculator: learning more
If you want to learn more about how a retirement calculator can help you - or how to boost your income upon your retirement - there are a number of organisations that can help.
The Financial Services Authority is one such body that can assist, providing unbiased information on various establishments that offer pensions services.
And the Pensions Advisory Service also provides lots of useful, free advice on how both work pensions and private pensions function and what you can do to make the most of them.