When it comes to 401k retirement savings, workers are largely on their own. The best companies “match” employee 401k contributions, but it is still up to the individual to make sure they are contributing adequately, make investment decisions and monitor the progress they are making towards their retirement goal.
A critical first step is to determine what your retirement goal is. This is often referred to as the retirement replacement ratio - the percentage of gross pre-retirement income that is needed to maintain the same lifestyle after retiring. We think this retirement calculator is best tool available on the web to help determine a person’s retirement goal. The calculator not only takes into the effects of inflation on retirement, but also research showing how outlays decline in retirement due to lower taxes and other factors. Using the retirement calculator together with this 401k calculator provides all the tools needed for average workers to establish their retirement goal and determine the contribution level needed to attain this goal.
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