Lifetime Savings Rate Calculator
Understand the current savings rate that is sufficient to meet your lifetime personal savings needs
If wealth were to be measured solely as assets currently owned, then financial and investment planning would be relatively simple. However, a much broader view is necessary. While higher income and more current assets obviously help, consumption differences between one person or family and another determine who builds sufficient assets over time and who is heading toward financial ruin.
A person with millions of dollars in current assets who spends at very high and unsustainable rates arguably is dollar wealthy now. However, will he still be wealthy in the future, and should we really consider him wealthy now, if he is headed toward financial ruin due to excessive consumption? Another person who has lesser dollar wealth now, but who spends at more modest rates that are sustainable across a lifetime, in fact, may be more “wealthy” now, because his financial plan is sustainable and does not lead to ruin.
By looking at wealth as a lifetime pattern of sustainable expenditures within one’s budget, then people who are indeed wealthy cannot be identified solely by their current assets or income. Personal wealth should, of course, measure current financial investments and other salable assets. In addition, personal wealth should also measure your ability to sustain your household budget, build up your investment portfolio, and weather potential financial risk and misfortune across your lifetime.
The need for an automated savings rate calculator to project your sustainable lifetime savings
Your intention to meet all expenses and debts across your lifetime will influence your current financial behaviors and your current financial plan — but only if you have a retirement savings calculator that can analyze and present the whole picture for you. You should consume and save across your lifetime in a balanced and conservative manner.
Since the future offers neither guarantees nor any predictability, you must further restrict your current consumption to build a substantial investment portfolio that can provide buffers for times of future difficulty, to fund your retirement, and to provide for an estate, if desired. You need a sophisticated and automated lifetime savings rate calculator and retirement withdrawal calculator for you to evaluate your sustainable lifetime savings and consumption rates.
How much you earn, spend, and save are by far the most dominant determinants of your long-term financial well-being. The VeriPlan lifetime retirement saving calculator can very capably evaluate sustainable lifetime consumption rates for you. The VeriPlan retirement planning calculator software projects the present and future value of your wealth and your potential estate in each year through age 100. This fully integrated retirement income calculator and retirement spending calculator software offers you unprecedented direct control to perform your own automated home financial planning.
VeriPlan helps you to understand your lifetime personal savings requirements and whether you current savings rate is sufficient
While most people tend not to save enough, VeriPlan is not a “you must always save more” future value projection engine and financial retirement calculator. The VeriPlan compound investment calculator projects your wealth and therefore your potential estate in each year through age 100. You can adjust your projection assumptions and decide about the balance you wish to set between your current expenditures and your projected estate (or lack thereof) in the future. The small minority of people who already save significant amounts and/or who already have substantial assets can use VeriPlan as a long term investment calculator to help decide when they are comfortable with increasing their current consumption.
This is an example of the pre-retirement savings rate graphic that VeriPlan automatically develops for all projection scenarios that you might wish to develop. The VeriPlan saving for retirement calculator automatically provides your projected total annual savings rates broken down into two components: A) your savings rate due to positive annual after-tax net earned income and B) your savings rate due to reducing the principal owed on investment-oriented debts, such as mortgage loans and college education debts.
Particularly early in many people’s adult lifes, it can seem very difficult to save. Savings is always important, and it is useful to recognize that investment-oriented debt payments are a form of savings. When such debt has been retired, then your “normal” savings rates usually will still need to increase substantially to ensure that adequate assets will be accumulated prior to retirement.
Note that the standard VeriPlan retirement planning tool savings graphic above compares your projected earned income savings and investment-oriented debt reduction progress. It does not include information about the annual growth of your investment portfolio. Additional VeriPlan graphics, which also are automatically developed for you, provide a separate and more detailed picture of the projected appreciation of your cash, bond, stock, real estate, business, and other assets developed by VeriPlan’s automated retirement planning calculators.
Because the future is completely unpredictable, your ability to modify any and all of VeriPlan’s assumptions allows you to adjust your do-it-yourself financial plan as your financial situation changes. You can change any value in VeriPlan and instantly develop a new projection. VeriPlan allows you to update all assumptions, such as tax rates, personal asset values, asset allocations, and asset growth rates.
VeriPlan is a retirement planning worksheet toolkit that can evolve as your life evolves. The VeriPlan retirement savings calculator is always ready for your next update, unlike paper plans that will increasingly grow obsolete as time passes. Furthermore, VeriPlan is far more useful that all those artificially restricted and more expensive financial planning software applications that require you to pay annual support fees and buy new versions just to keep up to date.
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About the author
Lawrence J. Russell is the author of this website and the books offered through this website. He is also the architect and developer of the VeriPlan software discussed on this website. He holds a BS from M.I.T. (1975), MA from Brandeis University (1979), and MBA from Stanford University (1982). Larry is a former [...])
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