A financial tool designed to estimate the potential outcome of retirement savings strategies. It typically incorporates factors such as current savings, projected investment returns, planned retirement age, and anticipated expenses to project a potential retirement income. For example, an individual might input their current 401k balance, expected annual contributions, and desired retirement age to receive an estimate of their future retirement funds.
This type of resource offers value by providing individuals with a projected outlook on their retirement readiness, which allows for adjustments in savings habits or investment strategies. It assists in identifying potential shortfalls and encourages proactive financial planning. Historically, such tools have evolved from simple spreadsheets to sophisticated online platforms that offer scenario planning and personalized advice based on individual circumstances.