Two of the most common retirement questions asked by 401k participants are “how much should I save?” and “how should I allocate my plan assets?” These questions can seem daunting if you don’t know where to look for answers.
How much should I save?
Below are links to online calculators that can help you estimate the amount you’ll need to save to retire comfortably considering all of your potential sources of retirement income.
- Vanguard – Among its many excellent website tools, Vanguard offers two calculators to help you estimate your retirement nest egg and how likely it will last through retirement.
- Retirement Savings Calculator – Calculates a nest egg at retirement based on how much you’re saving. Also calculates an estimated monthly income in retirement. This calculator can be found here.
- Monte Carlo Simulator – Calculates the probability your nest egg balance will last through your retirement years. It includes sliders to demonstrate how changes impact results. This calculator can be found here.
- Mint.com – You can link your Employee Fiduciary account to your Mint.com account. Mint.com lets you set retirement goals, gives you tips for meeting those goals, consolidates all of your investment accounts, and charts your progress.
- Social Security Administration (SSA) – Provides an estimate of your SSA benefits, based on age and current salary and gives a feel for how benefits will be affected by the age they are claimed. This calculator can be found here.
How should I allocate my plan assets?
To allocate 401(k) plan assets, you have three options – choose a single Target Date Fund (TDF) based on your estimated retirement date, select an asset allocation mix yourself or let a personal financial advisor do it for you.
Determining an appropriate asset allocation does not need to be difficult. Below are links to online calculators that can help you invest your account.
- Vanguard – Provides a custom portfolio recommendation by specifying how long you’re planning to invest and how much risk you’re willing to take. This calculator can be found here.
- CNNMoney – Determines a mix of different security types designed to meet your retirement savings goals based on your risk profile and date of retirement. This calculator can be found here.
- Bankrate.com – Designed to help you create a balanced portfolio of investments. Age, ability to tolerate risk, and several other factors are used to calculate a desirable mix of stocks, bonds and cash. This calculator can be found here.
- Vanguard – Vanguard’s MoneyWhys site offers articles, videos, and calculators designed to answer investing questions. Two of the eleven topics covered relate to retirement savings. The MoneyWhys site can be found here.
- Department of Labor (DOL) – The DOL’s Savings Fitness: A Guide to Your Money and Your Financial Future includes interactive worksheets. The worksheets help you manage your financial life and begin a savings fitness plan. This guide can be found here.