Your retirement income may be made up of several components that we have estimated on your behalf.
How do you calculate the progress towards my goal? Your date of birth is needed to calculate your future retirement income estimate, which is based on the estimated growth of your assets between now and the time you intend to retire.ĥ. The default 70% replacement income assumes coverage of all retiree expenses including retiree health care costs. Are retiree health care costs included in my goal? * Research shows that individuals' consumption gradually drops over the course of a 30 year retirement, even though health care costs typically increase as a percent of overall consumption.ģ. Living expenses and spending habits typically drop over the course of a 30 year retirement equating to a 5-15% reduction in annual spending.Tax efficiencies associated with drawing a lesser income overall (~2%).
Depending on your savings rate and pay, this could equate to 14% of annual pay. Annual Savings for Retirement are no longer needed.This currently accounts for 7.65% of annual pay for most people Social Security and Medicare tax (FICA).Some examples of expenses that typically go down: Some expense may go down or away, such as taxes and work related expenses, while some may go up, like health care costs and money you spend on new hobbies or activities. The reason 100% of your pre-retirement income may not be required to maintain your standard of living in retirement is because your expenses may change when you stop working. This number represents an accepted standard in the financial services industry and should only be viewed as a starting point for your retirement planning. This number is an estimate of the income you may need in retirement to maintain your standard of living. This is why we ask you to enter your salary the first time you use myOrangeMoney®. To start, your retirement income goal is set to equal 70% of your current annual pre-tax pay as provided by your employer or input/edited by you. How is my retirement income goal determined?
#Financial calculators retirement how to#
Our goal is to make sure you know where you stand regarding your readiness to retire and to ensure that you know how to improve your outlook.Ģ. MyOrangeMoney® is designed to give you a simple and actionable view of your retirement income needs and your current progress towards meeting those needs whether in 5 years or 40 years.
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