This program allows you to estimate what it will take to retire
based on today's assumptions. The
amount you wish to retire on in today's dollars will be increased over your
working years by the replacement rate you
choose. If you think your wages will increase 3.5% per year, use 3.5%. This
will increase your needs today by 3.5%.
The idea is to save the same percentage of your wages each year. If you see
your wages increasing at 3.5% a year,
simply increase your rate of savings by 3.5%
The program allows you to increase your first years retirement amount by the
replacement rate you have chosen for
retirement. When you reach your year you think you might pass on, you will
leave exactly zero in the bank so to speak.
This is a mathematically correct formula.
There are two tables showing the yearly cash flows for both Saving and retirement.