How Does A Basic Retirement Calculator Work?
Most people are interested in what situation they will be in when they retire. Everyone has an idea of how they would like their life to be. If you input what you are currently putting away for your retirement into a retirement calculator it can tell you what you can expect to have at the time of retirement. This can help you make any needed adjustments to be sure you can have the retirement life you want. This valuable information is at your fingertips. Just surf the internet to find a retirement calculator and start inputting the numbers.
Many people do not understand what a basic retirement calculator is telling them and they do not understand how it gets the numbers it spews back out at them. A basic retirement calculator is a guessing machine that takes current conditions, puts a huge guess for future trends on the current conditions, and then it tells you that there is no way you will be able to retire.
What the calculator does is determine what your standard of living is costing you now and tries to predict what that same standard of living will cost you at the time you are ready to retire.
The basic retirement calculator will even go so far as to tell you how much per month that $4,000 in 2007 needs to be to give you an equivalent lifestyle in 2027. The whole thing is a huge guessing game and the basic retirement calculator is just a tool the financial advisor uses to scare you into giving them as much of your disposable income as you think you can part with and then some.
When you look at history and the facts you may want to keep your money and live for now.
Can We Predict the Future?
The economy has been extremely unstable and unpredictable over the years. That is evident by the millions of dollars that have been lost on investments when the market crashes as it has every 10 to 20 years over the last century. One thing is for sure, the prices have consistently risen throughout the years. Consider how much it used to cost to buy a car.
Today, only 60 years later, that price has gone up over 2,700% to over $16,000 for a new car. So when you put an inflation percentage of 4% or 5% a year you are really not being honest with yourself. Between 1979 and 2000 the average American salary only went up by 11.5 cents per hour per year. A basic retirement calculator doesn't take that into account either.
Many people do not understand what a basic retirement calculator is telling them and they do not understand how it gets the numbers it spews back out at them. A basic retirement calculator is a guessing machine that takes current conditions, puts a huge guess for future trends on the current conditions, and then it tells you that there is no way you will be able to retire.
What the calculator does is determine what your standard of living is costing you now and tries to predict what that same standard of living will cost you at the time you are ready to retire.
The basic retirement calculator will even go so far as to tell you how much per month that $4,000 in 2007 needs to be to give you an equivalent lifestyle in 2027. The whole thing is a huge guessing game and the basic retirement calculator is just a tool the financial advisor uses to scare you into giving them as much of your disposable income as you think you can part with and then some.
When you look at history and the facts you may want to keep your money and live for now.
Can We Predict the Future?
The economy has been extremely unstable and unpredictable over the years. That is evident by the millions of dollars that have been lost on investments when the market crashes as it has every 10 to 20 years over the last century. One thing is for sure, the prices have consistently risen throughout the years. Consider how much it used to cost to buy a car.
Today, only 60 years later, that price has gone up over 2,700% to over $16,000 for a new car. So when you put an inflation percentage of 4% or 5% a year you are really not being honest with yourself. Between 1979 and 2000 the average American salary only went up by 11.5 cents per hour per year. A basic retirement calculator doesn't take that into account either.
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