Here is a retirement calculator to estimate how much your retirement fund will be worth in the future. Unlike other retirement funds, this one also considers how much the fund is stealing from you as commissions.
The parameters in the calculation are:
- Years of pension payment - The number of years you plan to work and accrue a pension.
- Market Interest - The yearly earnings you think (or hope...) your fund will make. If you want the value of the fund with respect to the current day currency value, enter the nominal percentage yield minus the average inflation you expect (for different countries, these numbers are different). If you want to know the value in units of the currency value at retirement (which is meaningless, since the cost of living will be higher too) do not subtract the inflation.
- Salary per month - Usually, this is the gross salary (before taxes) since the fraction which goes to pension funds is usually calculated from the gross not the net. Use any currency you wish (denoted ¤), the result will be in the same currency. If you live in the USA, enter the salary in US dollars. If you live in Sweden, enter the salary in Swedish krona, and so forth. The calculated value will be in the same currency you used.
- Salary increase rate - Enter the yearly increase rate you expect for your salary. As with the market interest rate, if you wish a real value for the pension in current day currency, use the nominal increase minus the inflation rate.
- Maximum Salary per month - If you are not self employed, there is probably a maximum salary in your organization which you could ever hope to get at some point...
- Salary going to pension - The fraction [out of 1] of your "Salary per month" which is goes to the pension fund. Note that this value can be larger than your actual payments. This is because your employer (if you are not self employed) could be transferring payments to the fund as well.
- Fraction of the payment going to insurance - In many pension funds, some of the money is not accrued and instead it is used to insure you in case something bad happens. This number is a fraction out of the payments.
- Payment commission - This is the fraction of the payment (in percentage) which is immediately gone, taken by your fund. In different countries, this value can be anywhere from 0 to a few percent.
- Yearly commission - This is the fraction of the accrued funds which every year is lost, taken by your fund
- Fixed monthly fund payment - Is there a fixed monthly payment, a "handling" surcharge?
At the end of the calculation, you'll find an estimate for the value of your fund at retirement, and also the extra money you could have had if your fund would have worked for free.
Retirement Fund Calculator