AOL Retirement Calculator Review

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AOL Retirement Calculator Review

May 8, 2008 – 6:55 am

My last post covered simple online retirement calculators. These calculators are valuable when you’re just getting started with retirement planning, but pretty soon you’ll be in need of a more sophisticated forecasting tool.

Today I’m going to review a calculator from AOL, and in a few days I’ll post about an alternative that is equally impressive. I’m not going to drone on and on about every feature or hold your hand by walking through 15 example calculations, but I do want to briefly highlight some of the features of each calculator.

Am I saving enough? Calculator at AOL.com http://calculators.aol.com/tools/aol/retire02a/tool.fcs

To be honest I didn’t expect a calculator on AOL.com to be worth much, but I was quite surprised. The calculator is one of the more advanced that I’ve seen, and has several features I found to be impressive.

Pros: The calculator allows separate inputs for spouses. It also includes advanced inputs for:

monthly wages after retirement (for X years)
pension inputs
funds desired at death
state and federal tax rates before and after retirement
initial, immediate, and remainder of retirement living expense estimates
2 future one-time investments inputs and different annual return estimates for each (great if you’re expecting a windfall or an inheritance)
Balances and investment inputs by account type (Roth, IRA, SEP, 401k, etc).

Cons: No Monte Carlo simulations, so the returns are simple calculations based on the rate of return assumptions that were input.

The AOL calculator provides a nice interface, arranged in tabs, and allows you to quickly update your assumptions and review the impact to your retirement plan. Its detailed set of input fields also facilitates “what-if” type analyses, provided you know how you want to adjust your inputs.