Retirement Calculators and Using What I Have

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At the start of a new year, I always find myself reflecting on my financial goals. Recently I’ve been focused on retirement and making sure we’re on the right track. I’ve been playing around with various retirement calculators to measure our progress.

I’ve been surprised to find out how unhelpful many of the free retirement planning tools available online are. Many of them don’t tell you whether they’re showing you numbers in today’s dollars or future dollars, so it’s hard to contextualize their results. Some also do a poor job of explaining the assumptions they’re using such as inflation and rate of return. Has anyone else noticed this and been frustrated by it?

Retirement Planning Tool

After several hours of searching, I finally managed to find a tool I like. Just to be clear, I don’t have any kind of affiliation with this tool or company. I just thought I’d share it in case you’re looking for a good retirement planning tool as well. It’s called NewRetirement, and although they offer a paid subscription, the free tool suited my needs.

However, I should mention that the tool is very conservative. As I understand it, the rate of return that it uses for its “average” confidence level is 3.5%. For pessimistic, it uses a 2% return. Personally, I use 5% in my retirement planning. So I chose the “optimistic” confidence level, which is equivalent to a 5% return. There’s also a bit of a learning curve when it comes to using the tool. But luckily there’s a NewRetirement forum on Reddit where you can go to ask questions.

I liked the feature that allows you to estimate how increasing your contributions will affect your retirement income. You can also change the general and medical inflation rate, which was helpful for me as future medical costs are a big concern of mine.

Are We On Track For Retirement?

Luckily it seems like we’re on the right track. Right now we’re contributing about 21% of our income to retirement including employer matching. We’re planning to increase our retirement contributions once we’re done building cash reserves in about a year. But even without bumping up our contributions, my estimates show that we would have surplus income in retirement.

I know that life can often throw curveballs though, so we’re not planning to rest on our laurels in this area. I want to make sure we’re always contributing as much as we can. That way if something bad happens like extended job loss, we won’t be short in retirement if we can’t contribute for a while.

Extracting More Value From the Things I Have

Another area I’m focused on right now is extracting more value from the things I already own. I saw a comment in a minimalism forum I’m a member of that resonated with me. There’s a lot of useful life in the things we own that we may not be using. For example, a book you only read once that just sits on the shelf has a lot more entertainment value in it that you can tap.

Seeing the books on my shelf as a form of waste has changed my perspective. I usually think about wasting money in terms of food spoilage or buying unnecessary items. However, viewing the board games that aren’t being played or clothes that aren’t being worn as a form of waste has motivated me to extract more value from my belongings.

My partner and I have a lot of board games from our childhoods. So this month we’re challenging ourselves to play through all of them at least once. Instead of going out to coffee shops to occupy ourselves during the weekend, we’re going to stay home and enjoy the entertainment we have.

What are your financial goals for the new year? Are you doing any savings challenges in January?

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2024 Financial Goals

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