Vera Retirement Calculator: Plan Your Financial Future
The Vera Retirement Calculator is a powerful tool designed to help you visualize your financial future in retirement. By inputting your current savings, annual contributions, expected investment growth, and desired retirement lifestyle, you can estimate your future nest egg and assess how long it will sustain your desired annual income. This calculator provides a clear projection, empowering you to make informed decisions about your savings strategy.
Why Use the Vera Retirement Calculator?
- Project Your Nest Egg: See how your current savings and future contributions could grow over time.
- Assess Sustainability: Understand if your projected savings will last through your entire retirement.
- Identify Gaps: Pinpoint if you need to save more, adjust your retirement age, or modify your spending expectations.
- Motivate Savings: A clear financial picture can be a strong motivator to stick to your savings goals.
How It Works: Understanding the Inputs
To get the most accurate projection, provide realistic estimates for each of the following fields:
- Current Retirement Savings ($): This is the total amount you have already saved across all your retirement accounts (e.g., 401(k), IRA, personal investment accounts).
- Annual Savings Contribution ($): The amount you plan to save and invest each year until you retire. Be realistic about what you can consistently contribute.
- Years Until Retirement: The number of years from today until your planned retirement date.
- Expected Annual Investment Growth (%): Your estimated average annual return on your investments, both before and during retirement. A common long-term average for a diversified portfolio might be 5-7%, but this can vary based on risk tolerance and market conditions.
- Desired Annual Retirement Income ($): The amount of money you anticipate needing to spend each year in retirement to maintain your desired lifestyle. Consider inflation and potential healthcare costs.
- Expected Retirement Duration (Years): The number of years you expect to be retired. This is often estimated based on life expectancy, for example, from age 65 to 95 would be 30 years.
Interpreting Your Results
The calculator will provide two key pieces of information:
- Projected Nest Egg at Retirement: This is the estimated total value of your savings when you reach your retirement age, factoring in your current savings, future contributions, and investment growth.
- Retirement Income Sustainability: This tells you whether your projected nest egg is likely to last for your entire expected retirement duration while providing your desired annual income. If it falls short, the calculator will indicate how many years your funds are projected to last, prompting you to re-evaluate your plan.
Example Scenario:
Let's consider a hypothetical individual, Alex, who is planning for retirement:
- Current Retirement Savings: $100,000
- Annual Savings Contribution: $10,000
- Years Until Retirement: 20 years
- Expected Annual Investment Growth: 7%
- Desired Annual Retirement Income: $60,000
- Expected Retirement Duration: 30 years
Using these inputs, the Vera Retirement Calculator would project Alex's total nest egg at retirement and then simulate if that nest egg can provide $60,000 annually for 30 years, considering the 7% investment growth during retirement. The results would indicate if Alex is on track or if adjustments are needed.
Start planning your retirement today with the Vera Retirement Calculator!
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function calculateVeraRetirement() {
// Input parsing and validation
var currentSavings = parseFloat(document.getElementById('currentSavings').value);
var annualContribution = parseFloat(document.getElementById('annualContribution').value);
var yearsUntilRetirement = parseInt(document.getElementById('yearsUntilRetirement').value);
var annualGrowthRate = parseFloat(document.getElementById('annualGrowthRate').value) / 100; // Convert percentage to decimal
var desiredAnnualIncome = parseFloat(document.getElementById('desiredAnnualIncome').value);
var retirementDuration = parseInt(document.getElementById('retirementDuration').value);
var resultDiv = document.getElementById('veraRetirementResult');
resultDiv.innerHTML = "; // Clear previous results
if (isNaN(currentSavings) || isNaN(annualContribution) || isNaN(yearsUntilRetirement) ||
isNaN(annualGrowthRate) || isNaN(desiredAnnualIncome) || isNaN(retirementDuration) ||
currentSavings < 0 || annualContribution < 0 || yearsUntilRetirement < 0 ||
annualGrowthRate < 0 || desiredAnnualIncome < 0 || retirementDuration < 1) {
resultDiv.innerHTML = 'Please enter valid positive numbers for all fields.';
return;
}
// 1. Calculate Future Value of Current Savings
var fvCurrentSavings = currentSavings * Math.pow((1 + annualGrowthRate), yearsUntilRetirement);
// 2. Calculate Future Value of Annual Contributions (Ordinary Annuity)
var fvAnnualContributions;
if (annualGrowthRate === 0) {
fvAnnualContributions = annualContribution * yearsUntilRetirement;
} else {
fvAnnualContributions = annualContribution * ((Math.pow((1 + annualGrowthRate), yearsUntilRetirement) – 1) / annualGrowthRate);
}
// 3. Total Projected Nest Egg at Retirement
var totalNestEgg = fvCurrentSavings + fvAnnualContributions;
// 4. Simulate Retirement Income Sustainability
var balanceDuringRetirement = totalNestEgg;
var yearsFundsLast = 0;
var finalBalanceAfterDuration = totalNestEgg; // To store balance if it lasts full duration
// Handle case where desired income is 0 or nest egg is 0
if (desiredAnnualIncome === 0) {
yearsFundsLast = retirementDuration; // Funds will last indefinitely if no withdrawals
finalBalanceAfterDuration = totalNestEgg * Math.pow((1 + annualGrowthRate), retirementDuration);
} else if (totalNestEgg === 0 && annualContribution === 0 && currentSavings === 0) {
yearsFundsLast = 0; // No funds, won't last
} else {
for (var i = 0; i < retirementDuration; i++) {
balanceDuringRetirement = balanceDuringRetirement * (1 + annualGrowthRate); // Growth before withdrawal
balanceDuringRetirement = balanceDuringRetirement – desiredAnnualIncome; // Withdrawal
if (balanceDuringRetirement <= 0) {
yearsFundsLast = i + 1;
break;
}
yearsFundsLast = i + 1; // Funds lasted this year
finalBalanceAfterDuration = balanceDuringRetirement; // Update final balance if it lasts
}
}
// Display Results
var resultsHtml = '
Your Vera Retirement Plan Summary:
';
resultsHtml += '
Projected Nest Egg at Retirement: $' + totalNestEgg.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ";
if (yearsFundsLast >= retirementDuration) {
resultsHtml += '
Retirement Income Sustainability: Your projected nest egg is estimated to last for at least ' + retirementDuration + ' years, supporting your desired annual income of $' + desiredAnnualIncome.toLocaleString() + '.';
if (finalBalanceAfterDuration > 0) {
resultsHtml += 'You are projected to have a remaining balance of $' + finalBalanceAfterDuration.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ' after ' + retirementDuration + ' years.';
}
} else {
resultsHtml += '
Retirement Income Sustainability: Your projected nest egg is estimated to last for only ' + yearsFundsLast + ' years, falling short of your desired ' + retirementDuration + ' years.';
resultsHtml += 'To meet your goal, consider increasing your savings, extending your working years, or reducing your desired annual retirement income.';
}
resultDiv.innerHTML = resultsHtml;
}