Retirement Age Calcuator

Cynthia (Yue) Hu

date: 12/14/2015

When Can You Retire?

Saving for the retirement may seem too far away for many people and they have no idea when they can retire or whether they can retire!

This application is designed to calcualte your retirement age.

  • All the inputs are key assumptions in the calculation
  • By changing the inputs, you can get updated retirement age easily which help you to make decision and take actions
    • For example, start saving earlier and more have a big impact
  • The main method is to compare accumulated asset value and present value of future living costs. When the acculumated asset value is bigger than the future living cost, you can retire.

Example

Here are the assumptions for this example:

  • Current Age 25
  • Expected to live till 80
  • Expected inflation rate 2%
  • Expected Salary Increase rate 3%
  • Expected annual return on asset is 4%
  • Current annual salary is $60000
  • Currect Net Wealth is $10000
  • Estimated Tax rate is 20%

Then you can retire at age 60. Your accumulated asset at retirement age is $1,486,246. Your total future living cost at retirement age is $1,439,920.

Plot of the Accumulated Wealth and Future Living Cost

The accumulated asset value increases and the total future cost decreases by time. Below is the chart for the example. plot of chunk unnamed-chunk-1

Try the Application

Try the application now at https://cynthiahu.shinyapps.io/project

Here are some tips for you to retire earlier:

  • Start saving for retirement earlier
  • Saving more
  • Make sure that your salary increase rate or asset return rate is no less than the inflation rate

It may be difficult for you to save more but at least you can start saving now and you will see the power of compound interest rate.