When doing retirement planning, everyone starts with using a retirement calculator these days, not knowing that the chances of it being correct or accurate are very slim. The fact that the entire process of using retirement calculators is based on feeding assumptive inputs is the first trigger point that should make you wonder – can you bank upon its output? While, this does not mean that retirement calculators are not helpful, they are, but you should not trust them completely.
The reason behind why you can’t trust retirement calculators is because you would be putting in assumptions to fetch how much would be enough for your retirements. Those assumptions have very less chances of being factually correct, say 30 to 40 years from now. Makes sense? The financial trends have been drastically changing every years, and every decade, including the rate of interest as well as the inflation. Taking it as constant for all the years and then deciding upon your retirement is foolish to be upfront.
Also, your income may fluctuate over the years, and so can your expenses. It is best to dig deep into the financial trends and history of the market, before judging what amount is near to your retirement amount. Don’t assume the inputs you would be putting in the retirement calculator, do a research on it, and then use retirement calculators to get an amount that just might be what you need for your retirement planning. Simply using retirement calculators randomly would only give you figure that would look good on the outset, but would be far from reality.