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To help with retirement preparations, the U.S. government has released an extremely helpful and easy-to-use retirement savings calculator to help you calculate and understand your IRA and other retirement finances. To learn more about it, why it works and where you can get it - keep reading.

Background

The calculator’s accompanying guide is titled “Taking the Mystery out of Retirement Planning.” It was produced by the Department of Labor’s Employee Benefit Security Administration branch. Essentially, the booklet provides a series of scenarios along with several easy-to-follow worksheets that help you calculate how much you need to set aside in long-term savings. The online worksheets are automated.

How to Locate It

Previously, you could only obtain a copy of the guide and worksheets by calling and requesting a printed copy. However, it’s now available online and can be viewed for free or printed off. The site includes a simple retirement savings calculator that even lets you store your information for up to one year.

If you prefer to order a free printed copy, you can do so by calling the Department of Labor at 1-866-444-3272. To access the website though, simply visit dol.gov/ebsa - the calculator and booklet can be found under Publications and Reports.

Why It Works

Probably the best feature of this retirement planning guide is how simple it is to use. The text is easy to read, the graphs are easy to understand and it’s actually interesting to read through - not a chore. Another great feature is how diverse and versatile this small publication and calculator really is. It talks about portfolio diversification, at-home children, split families and more.

The next feature that makes this online retirement calculator stand out from the competition is its ability to make very complex assumptions. An example of this is how it treats health care inflation. Other retirement calculators simply assume that all expenses will inflate at a rate of about 3.5%, however this calculator knows that healthcare typically rises at about 7%. That potentially major discrepancy is accounted for.

Problems With the Guide

The main drawback for the guide is that it appears to be written for people who are about 10 to 15 years from retirement. The online tools can help and assist recent retirees, but the main focus is on planning and saving in those last few, crucial years.

The other drawback is that there is little advice for people who suspect they may incur extra health care costs or the expense of dealing with potential dependents.

However, as a retirement savings calculator, it’s a great tool that’s extremely comprehensive and yet easy to use and understand. It understands government protocol, offers helpful suggestions and the best part about it - it’s completely free.