Study: online retirement calculators don't suffice

Online retirement calculators paint a prettier picture than what's really needed to save for retirement. AARP's study of 12 online retirement planning calculators found all but two don't take into account potential health and long term care expenses.

Web calculators in the study include:

  • CNN Money
  • T. Rowe Price Retirement Income Calculator
  • Principal Financial Group
  • Pacific Life
  • First American Bank
  • The Retirement Calculator
  • Ballpark E$stimate
  • AARP Retirement Calculator
  • Simple Planning
  • Simple Joe
  • Fidelity Investments calculator (available only to Fidelity customers)
  • Mind Your Finances

Only the last two calculators (Fidelity Investments and Mind Your Finances) provide estimates on health and long term care expenses.

Still, AARP labels the calculators as a "valuable service," saying without them, many consumers would have difficulty replicating the programs' calculations on their own.

According to AARP, retirement calculators would be better suited to help consumers if they contained the following:

  • Use a simple but improved estimate of life expectancies (a pull-down screen with standard tables of life expectancy at age 65 for given years of birth)
  • Include likely annual or monthly health care spending associated with Medicare medical and drug coverage, retiree health benefits, Medicare supplemental insurance, and private Medicare plans
  • Include the need for and cost of long-term care services
  • Adjust for age and gender
  • Include family history of health care challenges
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