5 must-use retirement calculators

There's no magic formula to calculate the perfect retirement savings plan (RRSP), but it's possible to come close. Here are five retirement calculators you should use today.

There’s no simple formula to figure out how much money you’ll need in retirement. However, there are plenty of tools to at least give you an idea. The web is rife with financial calculators that do everything from crunch mortgage numbers to determine whether you should use an RRSP or TFSA.

With so many online retirement calculators out there, it’s hard to know which are the best. We’ve looked through a bunch to come up with five of the most useful retirement-related financial calculators.

1. RRSP or TFSA?

With the TFSA becoming a more powerful retirement tool every year, many people are now wondering if they should use it instead of an RRSP. This retirement calculator, designed by Frank Wiginton, a Toronto-based financial planner, helps people decide which account is best. Input income, savings, annual expenses, real estate value and more. Then enter your email address and the site will send you a report telling you which savings vehicle to use.

2. Retirement Planner

While it’s meant for Americans, CNN Money has a detailed retirement planner that reveals how much money you’ll need to save today to reach your post-working financial goals. Canadians will have to do a little more work to use this properly -- for example, instead of calculating social security benefits, which only Americans receive, you’ll have to input your expected Canadian government benefits -- but it’s still easy to use. 

3. Life Expectancy Calculator

How much easier would financial planning be if you knew how long you’d live? Well, why not find out? A fascinating MoneySense.ca calculator tries to figure out how many years you’ve got left. It’s a fun exercise, but there is something to this. You enter your age, weight, body type, lifestyle and basic medical information; the calculator uses recent actuarial data to determine at what age you’ll die. Sounds morbid, but it really is a useful tool.

4. RRSP Contributions

Pretty much every financial institution has an RRSP contribution calculator on their site, but check out the one from the Investor Education Fund at GetSmarterAboutMoney.ca. This calculator will show you how much your RRSP will be worth by the time you retire. It’s simple to use -- just answer six questions, from how much you have in your account right to the age you’d like to stop working, hit calculate and see how much dough you’ll have at your disposal come time to retire.

5. Mortgage calculator

It’s one of the most basic retirement calculators out there, but it may also be the most important one. Canadians should have as little housing debt as possible when they retire, so use one of the many mortgage tools on the web to figure out when you’ll be debt free.

Moneyville.ca has a good one -- just input your mortgage amount, interest rate, amortization length and other details and then see how much you’ll have left by month and year. The calculator also shows you how much principal versus interest you’ll pay. Adjust the numbers to figure out how much you’ll need to pay each month to reach retirement with no housing debt.

Of course, retirement calculators don’t factor in life events or unexpected costs, but they can at least give you an idea of your overall financial picture. Try them and see if they change your expectations and goals.

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