Using Online Tools to Prepare for Retirement

When thinking about your retirement, it can be a daunting feeling. After all, you know that you'll need a large sum to be able to retire comfortably, but it's difficult to know just how much you'll need, as well as how you're going to reach that number. Fortunately, there are plenty of tools on the Internet that can help you figure out how to get started. Some tools are free, while others are fee based, and both types have their strengths and weaknesses.

Where to Find Retirement Tools

When you begin the search for online tools that can help you prepare for retirement, start with Web sites that provide you with some educational tools, too. Not surprisingly, it's important for you to have an understanding of various financial terms and rules before you begin trying to figure out the best way to reach your retirement goals. Without this basic knowledge, you'll just end up frustrating yourself by trying to use any of the online retirement calculation tools that are available.

The process of looking for a good Web site that has information on retirement accounts should involve seeking a Web site that contains some informative articles. Be sure to seek out articles that can especially help you understand the exact types of retirement planning issues that you don't understand. For example, Roth IRAs have different investing rules than 401 (k) accounts. Understand these differences through these articles. Many times, these articles will have links inside of them that lead to the types of online retirement calculation tools that you are seeking.

Some retirement tools are better than others, and some could even be harmful to you with viruses. Only make use of online tools for calculating retirement from Web sites that you can trust. The calculator will require that you enter some financial numbers, but it shouldn't require you to enter extremely personal information, such as a social security number or any account numbers. Online tools also shouldn't ask you to download any files to make them work, as all of the calculations should be performed online through the Web site.

Putting Online Tools to Work

Once you're found some trustworthy, helpful online tools for performing retirement calculations, it's time to begin entering a bit of information. With some of the most simplistic online tools, you'll just need to make sure your Web browser is up to date with the latest versions of built-in software, such as Java. For these easy to use tools, you will be asked to enter estimates about your current account balances, monthly savings amounts, and retirement goals.

Some more complex tools will allow you to create a year by year retirement plan, figuring out exactly what you need to save each month. You can adjust the projected rate of return that you think you'll receive with some tools. Others will allow you to enter the level of risk with which you're comfortable, and the calculator will construct a retirement plan and a projected return rate, based on this desire for risk.

When using online tools to prepare for retirement, keep in mind that these tools only can help you with half of the battle. You can perform all of the calculations that you want, but if you choose not to follow them, they obviously won't do you much good. You have to have the ability to force yourself to make contributions to the accounts to help your retirement savings grow. The online calculator shows you that achieving your retirement goals is possible, but you're the one who actually has to make it happen!

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