Dreaming Of An Easy Retirement? Calculators Can Help Get You There

We talk about retiring and visions of frolicking on a sun-drenched beach with coconut-infused cocktails give way to anxiety and even fear. Retirement is close enough to smell and taste and touch. But will we ever feel assured that we've saved enough to live comfortably and pretty much in the same manner as when we worked?

The average retirement age has crept up gradually over the years, from 62 in the mid-1990s to 64 for men, and from 60 to 62 for women. Yet when older workers are polled about when they think they'll retire, more than one in four now say at age 70 or later. One in 12 say they'll never retire, according to the latest findings from Employee Benefit Research Institute.

To help us understand what we'll need to sock away in order to live the way we envision, retirement planning is critical.  AARP's retirement calculator was recently touted by Steve Vernon in his story for CBS News about the best online tools to help people save for retirement. The calculator got high marks because it's easy to use, and among other virtues, assesses whether we need to save more (or work longer) to avoid a shortfall in retirement.

The age at which we retire has much to do with our ability to live comfortably, apparently. In a "retirement readiness" study by the Center for Retirement Research at Boston College, only about 30 percent of households are projected to be prepared for retirement at age 62. Wait until age 66 and the readiness climbs to 55 percent. At age 70, we're almost golden because 86 percent of households are considered to be prepared to live nicely.

The benefits of working longer are many: we get a higher Social Security benefit if we wait until age 70 to claim benefits and we get more years of  tax-deferred growth in our retirement accounts. And that gives us a higher replacement rate of preretirement income to look forward to.

So maybe we can get to sip those tropical drinks under baby blue skies on a beautiful beach after all?

Photo credit: JJWright via flickr.com