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How important is Social Security?
How will losing your Social Security benefits affect your retirement?
Use this calculator to determine how losing this important retirement
asset could affect you. Click the report button to see your retirement savings
with and without Social Security benefits.
Definitions
- Social Security income
- Social Security is based on a sliding scale depending on your income, how long you work and at what age you retire. Social Security benefits automatically increase each year based on the rise in the Consumer Price Index (CPI) the most common measure of inflation. Including a spouse increases your Social Security benefits up to, but not over, the maximum. This calculator provides only an estimate of your benefits. Your actual benefit may be higher or lower depending on your work history and the complete compensation rules used by Social Security.
- Current age
- Your current age.
- Current retirement savings
- Total amount that you currently have saved toward your retirement. Include all sources of retirement savings such as 401(k)s, IRAs and Annuities.
- Household income
- Your total household income. If you are married, this should include your spouse's income.
- Percent of income to save
- The percentage of your annual income you will save for your retirement goals.
- Expected salary increase
- Annual percent increase you expect in your household income.
- Expected rate of inflation
- The annual inflation rate you expect through your retirement. This is used calculate increases in your retirement expenses and increases in Social Security.
- Are you married?
- Check this box if you are married. Married couples have a higher maximum Social Security benefit than single wage earners.
- Age of retirement
- Age you desire to retire.
- Years of retirement income
- Total number of years you expect to use your retirement income.
- Percentage income at retirement
- The percent of your household income you will need to have in retirement income.
- Pre-retirement rate of return
- This is the annually compounded rate of return you expect from your investments before taxes. The actual rate of return is largely dependant on the type of investments you select. For example, for the last thirty years the average annual rate of return for domestic equity stocks has been about 10%. Savings accounts at a bank pay as little as 2%. For the purposes of this calculator taxation is not factored into the results.
- Post-retirement rate of return
- This is the rate of return expected during retirement. It is often lower than the return earned before retirement due to more conservative investment choices to help insure a steady flow of income. For example, a balanced portfolio of stocks and bonds may earn two to three percent less each year, but would be less susceptible to dramatic stock market fluctuations.
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