Salary Enter your current annual salary or annual
wages here. If you are married,
enter the sum of both of your salaries.
Contribution percentage Enter a percentage between
1% and 15% that represents the percentage of your
income that you wish
to withhold into your 401(k) account. The withholding may not exceed 15%.
Also, a person cannot contribute more than $11,000 to a 401(k) account (2002 limit) in
any year, so adjust this percentage to make sure that the total
annual withholding does not exceed $11,000. If you are married, you
can both save up to $11,000 for a potential total of $22,000.
Match percentage If your company matches your
contributions, enter the matching percentage it uses (for example,
if your company matches 3% of your salary, enter 3 here). If your company
does not match, enter 0.
Pre-retirement interest rate Enter the interest rate you expect to
earn on your 401(k) account prior to retirement. To give you two ideas, current CD
rates run between 5% and 6%, while
the stock market has returned an average of 10% or so for many years. For
6%, enter 6 in the entry field. Typically, you would invest more aggressively
prior to retirement and then move the money to less-risky investments after
retiring.
Post-retirement interest rate Enter the interest rate you expect to
earn once you retire. See the previous field for an explanation. You might enter 10 in the previous field and 6 here, for example.
Inflation rate Enter the expected inflation rate during
the coming years. 4% is a good average number for the past 10 years and would
work well here. If you are more pessimistic, choose a higher number.
Salary increase rate Presumably, your salary will
rise over the years. It should, at a minimum, rise with the inflation rate
in the form of cost-of-living increases. It may rise faster than that depending
on the job you hold. Enter the rate at which you expect your salary or wages to
increase. If you are unsure, enter the inflation rate from the previous field
here.
Current 401(k) value Enter the current value of any 401(k)
accounts you have now.
Current age
Expected retirement age Enter the age at which you plan to
retire. 65 is normal, but you might want to consider early retirement options.
Desired retirement income Enter the amount of money you
would like to be able to spend each year during retirement -- in today's dollars . For example, if you look at yourself and say, "If I were to retire today, I would feel comfortable if I had $30,000 per year to spend," then enter $30,000 here. Remember that you will have to pay taxes on that amount just like you do today, so take that fact into account. A good ballpark figure recommended by many financial experts is 80% of what you currently make per year. Therefore, if your salary is $30,000 now and you feel comfortable with that amount, you could enter ($30,000 * 80%) $24,000 in this field.
Click the button to see your retirement outlook. 401(k) contribution This field shows how much money you
are contributing to your 401(k) account per year given the contribution percentage you entered above. If this value exceeds $11,000, adjust the percentage you entered.
Matching contribution This field shows how much money your
employer is contributing to your 401(k) account based on the matching percentage
you entered above.
401(k) account value at retirement This will be the total value of your 401(k) account when you retire.
Years in Retirement Value At the end of 1 year
At the end of 2 years
At the end of 3 years
At the end of 4 years
At the end of 5 years
At the end of 10 years
At the end of 15 years
At the end of 20 years
At the end of 30 years
At the end of 40 years
