Want to retire? I’m sure we all want to stop working at some point but according to CNBC, 81% of Americans have no idea how much they need to retire. What’s worse, is that nearly 1 in 3 Americans have no retirement savings which keeps them trapped in the workplace for extended years.
If you don’t want to be stuck working until you’re 80, you have to think about retirement, investing and stashing something away.
Is Early Retirement Possible?
If traditional retirement doesn’t sound good enough to you, you may be interested in early retirement which sounds like a dream to most of us. I’ll admit, I’m in my 20s and never really thought about retirement until I started reading personal finance blogs.
Now that I know my options and how important investing is, I’m actually considering possibly reaching financial independence early that is, within the next 20 years and I’m excited about it.
I can’t say for sure that I’ll be 100% retired in 20 years but I want to be financially independent which is almost the same thing meaning I want to have the option to work instead of having to work as a necessity.
I hope to pay off the rest of my student loan debt this year, then start investing heavily in retirement accounts, the stock market, and real estate. My plan is to diversify my income and investments for the best results and commit to living as frugal as I can so that’s it’s still comfortable for me.
While all these plans are nice, it’s crucial that I track my net worth, investments, and run numbers to see how much I really need to retire and live a certain lifestyle. FIRECalc is a great tool to use if you’re looking to calculate how much you’d need to retire too.
FIRECalc may seem like just another retirement calculator, but it is anything but. In fact, this is easily one of the best retirement calculators on the market, and it is something which is continuing to get better too.
What Is FIRECalc?
As you can probably tell, FIRECalc is a retirement calculator that will help you determine how much you need to retire based on how much you expect to spend each year during retirement. When you input your data into the calculator (which barely takes any time at all), it will do some computer wizardry.
It will look at what the historical volatility in your markets are. It will then tell you whether your retirement portfolio was strong enough to get through some of the most financially trying times in history. If your retirement portfolio would have been enough to survive the Great Depression, then it probably would be strong enough to survive what the future is going to through at you.
What Questions Can Firecalc Answer?
Quite a few! You can tell the software what investments you have and how much you plan to take out each year. It will then give you accurate information with regards to what combination would be successful. It will even tell you how much you can plan to spend each year based on the information that you are putting into the software.
There are plenty of things that you will be able to factor into your decision making about whether you will be able to afford your future when you retire. This includes details of your Social Security payments, or whether there will be drastic changes to your portfolio.
Why is the Software So Handy?
Well, it is so handy because you are able to change up the information in it however you want. When many people are planning for their retirement, they do not plan it out all that much. They say “this is our retirement plan, we will make do with what we have”.
When you use Firecalc, you will be able to change up various pieces of data in it. By changing up this data, you will be able to determine what you can and can’t do. Think of this as one of the best methods for planning your future.
Can you be positive that this information will be accurate for the future?
You can to an extent. If you are getting a 100% success rate throughout history, then you can feel confident that you have a decent retirement plan in place. Firecalc also does work hard to ensure that US stock market performance and everything is factored into the equation.
Honestly, we doubt that the next few decades are going to be the worst in history from a financial standpoint, so you can feel confident that the information Firecalc gives you will be accurate.
When it gives you data, it will not necessarily predict what is going to happen in the future. It tries to predict what will not happen. So, the information will be based on the worst possible case.
Final Word
This software the easiest thing to use, but planning and preparing for your retirement is not supposed to be easy even though it can be motivating. You are going to be planning how you can live many, many years of your life. What FireCalc, instead, aims to do is ensure that you are able to plan properly. It does this very well so you can enjoy an early or traditional retirement with confidence.
Have you thought about retirement and started preparing yet? Have you ever used a retirement calculator before?
Chonce is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey to becoming debt-free on her blog, mydebtepiphany.com.
