Most retirement calculators are designed to err on the conservative side. As such they are oversimplified and do not offer a realistically analysis of your retirement needs. They typically do not include all the financial features that can help you achieve your goal, especially when your available income is limited and you need tap into all the resources you have available. The truth is most retirement calculators are not designed to allow you a fair chance to succeed. This is because the people behind them want you to invest more with them or in the case of the government, to continue to work as long as possible.
Below is a comparison of the key features offered by our retirement planners that the retirement calculators available on the web do not offfer. All highlighted items on the table are features that are unique among the sample retirement planners/calculators reviewed and the ones available for download on this site. While there may be others planners/calculators out there that may have some of important features highlighted below, we have not across them.
RETIREMENT PLANNER/CALCULATOR COMPARISON
GENERAL
This is where the basic information particular to you are entered. All retirement calculators will require you to enter your age, age at which you want to retire and the length of your retirement.
None of the retirement calculator surveyed other than our own offered a joint spousal analysis. Being able to track assets and plan for retirement as a couple offers advantages that cannot be realized accurately when assets are combined and tracked jointly as a single entity. Some
Our retirement planners are the only ones with the ability to track assets held separately up to retirement more accurately, and allow for income splitting and variance in mandatory RRIF withdrawals (dependant on spouse's age). Both of which has significant tax implications.
Inflation, which has a significant impact on cost of living and pension income is also not considered among the retirement calculators surveyed. This is especially important since it allows you to predict your retirement income needs more accurately based on present day costs as well as allowing for changing government pension income indexing.
ASSETS
Registered and Non-Registered Savings
Most of the retirement calculators surveyed offered RRSP, TFSA and non registered asset tracking but none offer multi-stage asset tracking except for our planners. Multi-stage is essential to accurately track the growth of your assets as it allows for setting higher aggressive returns during the early stage and more conservative return approaching retirement. Multi-stage tracking will also allow you to change your investment amount or delay your investment to reflect real-life situations i.e. ability to invest more after kids leave home and/or mortgage is paid off, or delaying if you are planning early and are not in a financial position to start your retirement savings right away.
Home
None of the retirement calculators surveyed offered the ability to track your home/property assets. For some this asset may be the only significant saving they can manage. The ability to track the growth of your home investment for potential access to finance your retirement is essential for most. Providing multi-stage tracking before retirement with the ability to change the value will also allow you to plan a future home purchase, or acquire additional investment properties and/or up-sizing your home. Multi-stage tracking is also offered during retirement with the ability to sell and repurchase to reflect selling off investment properties and/or downsizing your home to gain access to needed funds.
Government Pensions
None of the retirement calculators survey considered government pensions as a potential asset before retirement. The detailed version of the retirement planner (Version 2 and 2a) allows you to divert your QPP and OAS amounts either before tax towards an RRSP or after-tax towards TFSA or non-registered savings. For those who plan to retire after 60 (QPP/CCP) or 65 (QPP/CPP & OAS), having this feature will allow you the possibility to accumulate additional and significant savings towards your retirement. The planner will calculate your CPP/QPP and OAS amounts automatically unless an overriding amount is entered and also calculate your QPP/CPP supplement amounts. By entering your available TFSA headroom, the planner will also limit the transferred amounts accordingly with the balance directed to your non-registered savings.
RETIREMENT INCOME:
Budget
One of the most important component in your retirement planning is how much you need income you need to live and yet most retirement calculators only allow you to enter a single amount, and 70% of your gross salary is typically what is recommended, None of the retirement calculators surveyed offered detailed budget calculations with varying income requirements to reflect the obvious changing income needs throughout the retirement period. Ours is broken down to 3 and 4 stages to allow you to adjust your required budget at various stages of your retirement. All calculators ask for your expected "gross" income while ours is based on after tax amount. Not knowing your tax bracket makes it difficult to estimate your income needs. Our planer is also the only one among the ones survey that takes inflation into account. This allows you to estimate your budget based on current costs.
QPP and OAS Pensions
QPP/CCP pension income supplements is not considered and only one calculator allowed for indexing of pension amounts.
Company Pensions
Some of the calculators reviewed considered different pension types which our planner does not.
Other Income
Additional income during retirement is considered by most calculators but one-time benefits which allows for income from sales of fixed assets or inheritance income is only considered by one of the calculators surveyed.
RRIF Income Drawdown
None of the retirement calculators calculate consider the impact of conversion from RRSP to RRIF requiring mandatory drawdown and its tax implications. Multi-stage tracking of your RRIF account allowing for changing return on investment is also not offered among the calculators reviewed.
