Retirement Calculator Instructions- how to use the free Excel retirement calculator- link below
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The retirement calculator allows you to assess
where you are in your retirement planning and what changes you need to make to improve
your retirement situation. The spreadsheet works as follows. The blue cells are where you need to put some
inputs and we have provided some for you but you can change these. The results, in summary form are shown here
and in more detail year by year on this side. So let’s try a scenario out. The first thing we would do is put in the
numbers that we know with a fair amount of certainty – so for example, an annual income
– you might put R100 000 – the total savings to date – presumably we know that – so
we are going to put R400 000.
The current age – hopefully you know that
– so let’s put forty. Decide age of retirement – for now let’s
try fifty. And lastly we are going to put what percentage
of our income we are going to save. So let’s try ten percent. You will notice that things like inflation
in your country, and the return over inflation – we have put a number in, but you should
get professional help to guide you on what those numbers should be.
Anticipated age of death – we have put in
one hundred just as an upper limit, and we’ve said for the percentage of annual income required
in retirement we’ve used eighty percent. The results, down here don’t paint a great
picture. So at the moment it is telling us we can only
retire – if we retire at fifty – we can only afford to retire until we are sixty six. We should have had 2.4 million at retirement
date but we only had 1.3. So now you can use the calculator to see how
you can improve the situation. So the first thing you might want to do is
see how much you have to increase savings by. So let’s up savings to maybe, twenty percent
and you’ll see that although it has an impact it is still not what we need.
We could try thirty percent but now we are
starting to go into areas where it is unfeasible and even that doesn’t work. So I am going to go back to ten percent. What else can we try? Well perhaps we should retire a bit later. So let’s try when we are fifty five. You will notice that that makes a massive
difference. Let’s try when we are sixty and you will
see suddenly now we can actually retire till much older and again that’s how much we
required – that’s how much we had. Just to show how it looks on the side here
– it gives you a detailed breakdown of the savings from your age until you retire and
then from retirement, how you are going to use up your savings and showing how your savings
will last – in this case past your planned retirement age.
You can then play with these so perhaps you
don’t want to retire at sixty, you actually want to retire at fifty five – again we
haven’t met our criteria so maybe we should save more – let’s try fifteen percent
– close but no cigar. Let’s try fifty eight and again we see we
can do that and you can get quite specific or play with gold seek. So you’ll see somewhere in that region it
looks like the ideal situation for us..