Your Retirement Savings Goal for 2021

I’m trying something new this week. I built a calculator just for you. It’s meant to help with your retirement planning and look at the next baby step on your retirement path. The calculator asks you some basic information—your age, future retirement details, whether you’re conservative or optimistic about investments—and then calculates a suggested retirement savings goal for 2021.

I know New Years is more than a month away. But it can’t hurt to start thinking about 2021’s resolutions today. Saving money can be one of those resolutions, and retirement is a great thing the save for.

But a retirement savings goal is a difficult number to quantify. What if you retire at 60? At 55? At 50? What if your investments do well? Do poorly? What if they’re somewhere in between? You certainly don’t want to run out of money, so how should you account for that? This calculator answers all these questions.

There are lots of moving pieces in retirement planning. This calculator isn’t a cure-all, but it does simplify some complex math. It boils all the inputs down into one simple output: how much should you save next year to keep you on your retirement path?

And don’t worry—I explain all of my assumptions towards the end of the post.

Go ahead—give it a shot!

Drumroll, Please!

There it is! The field above shows your calculated retirement savings goal for 2021. This is the amount of cash the Best Interest recommends you should put into long-term investments. If you follow this advice year after year, you’re likely to achieve your retirement goals.

Below you’ll find a few different ideas: a FAQ, some Things to Try, and a list of Assumptions.

As always, let me know if you have any questions.

Retirement Savings Goal FAQ

As you ask more questions, I’ll update the FAQ below.

“What Should I Do With the Money I Save?”

I’m happy to tell you how I invest. That’s what I’ll be doing with my retirement savings in 2021.

“I Think the Calculator is Broken…”

I did not test this calculator like a software company would, so I admit that some inputs might “break” the calculator or lead to strange results.

My first recommendation: make sure you use “realistic” inputs. I tested a bunch of realistic scenarios, and they all ended up working as expected. But I didn’t try every possible combination. If you say you’re 50 years old and want to retire at 40, then you need a time machine, not a blog calculator.

That said, if you’re being realistic and you still think it’s broken, let me know.

“My Retirement Savings Goal Seems Really High…”

First, I recommend you read the next section. Most of us will have supplemental income in retirement (e.g. social security), and the next section describes how you should incorporate that into the calculator. It’ll lower next year’s retirement savings goal.

After that, there’s a stark realization here. Retirement is expensive! If you hope to retire soon, live a rich retirement, and/or have a long retirement, then you’ve got to save a lot of money.

There’s a reason why your younger years are so important for investing.

“How Should I Consider Supplemental Income in Retirement?”

There are dozens of ways you might supplement your income in retirement. Common examples include Social Security and pensions. The lotto doesn’t count.

If you fall into one of these camps, I recommend re-running the analysis after reducing your “Annual Spending in Retirement.” Let’s work through an example.

The calculator is pre-set to assume $36,000 in annual spending. The average Social Security pay-out in 2020 is about $1500 per month, or $18,000 per year. Therefore, I’d recommend adjusting the calculator’s “Annual Spending in Retirement” to $18,000 ($36k – $18k = $18k).

“Why Is My Retirement Savings Goal NEGATIVE?!

There are a few simple explanations why your savings goal might be negative.

The first and most common: you already have enough money saved for retirement! This is really good. This especially applies if you’ve been diligently saving for years and plan a low-cost retirement.

If you doubt you already have enough saved, go back and check your calculator inputs.

If you’ve checked your inputs and something still seems wrong, let me know.

“I Have NO IDEA What My Spending in Retirement Will Be. Help!”

Fair enough. It’s hard to predict what you’ll spend in retirement.

My recommendation: start with what you spend right now. And if you don’t know what you spend right now, that’s your sign that you should start budgeting.

Once you know how much you spend right now, take your largest expenses and scale them for retirement. Here’s my personal example of simple scaling:

  • Housing – I expect this to decrease, since I’ll have my mortgage paid off when I retire. (-$900) per month.
  • Kids – I don’t have any now, and I also plan that I won’t have any who I’m actively supporting when I’m retired. No change in this category.
  • Automotive – about the same.
  • Food, consumer good, etc. – about the same.
  • Medical – to be safe, I’m going to increase this number. Based on some quick research, +$500 per month.
  • Fun stuff – I think I’ll do a bit more fun stuff in retirement. For now, I’ll allocated +$200 per month to fun.

That’s it. This brief, simple scaling suggests I’ll spend about $200 less in retirement than I’m spending now.

But Jesse—by the time you retire, won’t the Best Interest be pulling in millions of dollars due to its amazing ability combine financial education with entertainment?!

Maybe, but I’m playing it safe for now.

“Should I Include Taxes?”

Most likely! Let me give you my personal example. About 75% of my current retirement savings lie in accounts that will get taxed upon withdrawal in retirement.

So if I need $40K for my actual spending, I’ll probably need to withdraw between $45K and $50K—the extra goes to income tax and capital gains tax. As such, I should input that $45 – $50K value into the Annual Spending on the calculator.

“Is My ‘Current Long-Term Investments’ Just My Net Worth?”

Not quite. Net worth includes many assets and liabilities that should not be considered long-term investments.

Your emergency fund is part of net worth, but it’s not growing like an investment. Your house might be a long-term asset, but you likely won’t be selling it in order to retire. And you debts count against your net worth, yet don’t count against your long-term assets. You can simultaneously save for retirement and pay down your debt.

Things to Try in the Retirement Savings Goal Calculator

Here are some cool ideas I recommend you try with the calculator. Keep two things in mind as you play around. The first is to investigate how changes in your life today can affect your long-term goals. The second is to realize that certain things—like market performance—are out of your hands, yet can still affect you.

1) Play With the Optimism/Pessimism Slider

Market performance plays a huge role in the retirement savings goal calculator. It controls both how your nest egg with grow leading up to retirement and how your nest egg will shrink as you withdraw in retirement.

If you’re too optimistic, you might not save enough. If you’re too pessimistic, you might end up saving more than you’ll ever need—and thus work longer than you need to.

I recommend you play around with the slider to understand the range of recommended savings goals. If you can, set the bar high and aim for a conservatively large savings goal in 2021. As the years go by, you can always reevaluate.

Remember—saving more money in your younger years is vital.

2) Give Yourself Some Extra Years

We don’t often get to play God, so take this chance to tack on extra years at the end of your life. Running out of money in retirement is not ideal, so this exercise will give you some buffer years at the end of your life—and will increase your 2021 retirement savings goal accordingly.

3) Go Fat, Go Lean

Take your 2021 savings goal—let’s say it’s $10,000.

Now we’re going to try to re-create that $10,000 result in two separate ways.

First, try to decrease your Annual Spending by 50% while also decreasing your retirement age. Tweak your retirement age until your recommended 2021 retirement savings goal ends up around $10K again. This gives you a rough idea of how quickly you could achieve a “lean” retirement. You’d be leading a spartan lifestyle, but retirement could be closer than you think.

Second, try to increase your Annual Spending by 50% while also increasing your retirement age. Again, tweak your retirement age until the calculator recommends saving $10,000 in 2021. This gives you an idea of how much more time you’d need to work in order to eventually live a “fatter” retirement. You could afford a lot more—-but at what cost? It’ll likely lead to many more years of work.

When I try this exercise, I get the following:

  • My normal input –> retire at 55
  • Lean = 50% less retirement income –> retire at 43
  • Fat = 50% more retirement income –> retire at 63

I’m not sure when I want to retire. But the spectrum of potential retirement lifestyles necessitate a spectrum of career lengths and savings.

The entire “FIRE” movement is based on these spectra of retirement lifestyles and career lengths.

Assumptions in the Calculator

An analysis is only as good as its assumptions. If I assume that I can run at 60mph, then my path to become a world-record holder is paved with gold. Usain Bolt, I’m coming. Bad assumptions = bad answers.

So here are some of the most important assumptions from today’s retirement savings goal calculator.


I assumed 2.5% inflation per year. That applies to every year in the calculator. It affects how your current 2020 spending gets multiplied to reach a future nest egg goal. This is as good an assumption as one can make based on historical inflation rates.

Portfolio Makeup and Performance

Like the original Trinity Study, I assumed that your portfolio would comprise a 50/50 mix of stocks and bonds. Important note! Many portfolios—especially if you’re young—will leaning much heavier into stocks than bonds. This makes your portfolio riskier, but also is more likely to lead to better long-term returns. This is why I recommend you toggle to Optimism/Pessimism slider.

But let’s go back to the 50/50 portfolio. The Optimism/Pessimism slider affects the stocks’ simulated performance, varying between 1.9% growth per year and 11.1% growth per year. These numbers represent the worst 30-year annual return and best 30-year annual return in S&P 500 history, respectively. The bonds were assumed to return a steady 5% per year.

If you’re interested in the market’s past (and potential future) performance, this decade-by-decade comparison is a good starting place.

So when the slider is set at 0, the stock portion returns 1.9% and the bond portion returns 5%. The net result is a 3.45% return. When the slider is set at 10, the stock portion returns 11.1% and the bond portion still returns 5%, leading to a net 8.05% return.

Each increase of 1 on the slider will increase your annual portfolio return by about 0.5%.

This is way too coarse for some people. For a future iteration, I’d like to add functionality where you can choose your own stock/bond allocation. If you’d be interested in something more, let me know.

“The 4% Rule”

The 4% Rule is a brief nickname for the outcome of the famous Trinity Study. The rule states that…

  • if you’re planning a 30-year retirement
  • and if your portfolio is 50/50 stocks and bonds
  • and you want to be 95% confident in your retirement planning

Then you can withdraw 4% of your nest egg in Year 1 of your retirement, and then increase that withdrawal in each subsequent year to account for inflation. This makes your nest egg target easy to calculate—it’s your annual spending divided by 4%, which is equivalent to your annual spending multiplied by 25.

If you want more conservativism or if your retirement will last longer than 30 years, then you’ll want a “lower” rule (e.g. 3.5%). This increases what your target nest egg would

If you want to be more optimistic about your investments, or if your planned retirement is shorter than 30 years, then you’ll want a “higher” rule (e.g. 5%).

For this calculator, I used your input of “optimism or pessimism” to scale this “rule” between 3.5% (pessimistic) and 4.5% (optimistic). Then I scaled that number using your planned retirement length. Longer retirements scale the number down, shorter retirements scale the number up.

Clear the Memory

Thanks for giving the calculator a try. It’s my first attempt. If you didn’t get the memo earlier, I’d love to get feedback.

I hope you find it helpful. A retirement savings goal is something to think about every year. So why not start in 2021?

If you enjoyed this article and want to read more, I’d suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.

This article—just like every other—is supported by readers like you.


Selecting the Perfect Trading Timeframe as a Forex Trader

This page may include affiliate links. Please see the disclosure page for more information. Which trading timeframe is best? As a new forex trader in the Foreign exchange market, there’s a bit of a learning curve on which is best. A new Forex trader can become frustrated and try different timeframes until they eventually lose a significant…

The post Selecting the Perfect Trading Timeframe as a Forex Trader appeared first on Debt Discipline.

Selecting the Perfect Trading Timeframe as a Forex Trader was first posted on March 2, 2020 at 9:10 am.
©2019 "Debt Discipline". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at


What is a Gold IRA?

When it comes to saving for retirement, you have a lot of options to choose from. But one that you may not have considered is investing in gold — namely, a gold IRA. A gold…

The post What is a Gold IRA? appeared first on Crediful.


6-Month CD Rates: Earn More Money

6-month CD rates can be a smart strategy for your short-term saving goals.

If you’re saving for a house, you may be wondering where you can park your hard-earned cash safely and earn interest at the same time.

If so, you should consider a 6-month CD, because the rates can still be very competitive.

In fact, 6-month CD rates can range from 0.50% APY to 1.00% APY, which produce higher yields than bank savings accounts.

Also, a six-month CD comes with FDIC insurance that protects your money up to $250,000.

Why shouldn’t you take advantage of a higher yield and safety?

Of note, if you are looking for higher yields, consider investing in Vanguard index funds.

In the meantime, here’s a table listing the best 6-month CD rates.

6-Month CD Rate APY Minimum Balance
EmigrantDirect CD 1.00% $1,000
MySavingsDirect 1.00% $1,000
Limelight Bank CD 0.95% $1,000
Sallie Mae Bank CD 0.90% $2,500
BMO Harris Bank CD 0.80% $5,000
Live Oak Bank CD 0.80% $2,500
Bank5 Connect CD 0.75% $500
HSBC CD 0.75% $1,000
TIAA Bank CD 0.75% $5,000
Ally Bank CD 0.65% $0
PurePoint Financial CD 0.50% $10,000
Best 6-month CD rates to help you achieve short-term saving goals.
CIT Bank Money Market 1.00% APY Review
CIT Bank Savings Builder 0.95% APY Review
CIT Bank CDs 0.75% APY 1 Year CD Term Review
CIT Bank No Penalty CD 0.75% APY Review

What is a CD?

A certificate of deposit or CD is a type of short-term investment where you agree to keep your money for a certain period of time, usually for three months to several years.

You usually open a CD with a traditional bank, credit union or even an investment company. For example, investment company such as Vanguard offers brokered CDs.

Once the CD “matures” or becomes “due,” you receive the principal money invested, plus interest.

If you withdraw your money before the stated period of time, an early withdrawal penalty will apply.

However, there are some banks that offer CDs with no penalty. Banks such as CIT Bank has an 11-month, no penalty CDs. However, those CDs usually have lower APY.

CDs are very safe. That’s because they are insured by the federal government for up to $250,000.

So, if you’re looking for safety, a CD is a good choice.

Is a six-month CD right for you?

Before you start shopping for the best 6-month CD rates, you need to ask yourself these questions:

  • How much interest will you earn?
  • Are 6-month CD rates better than interests from a savings account, money market funds, etc?

With a 6-month CD, you can expect to earn good money. But not a lot when comparing to longer CD terms. It is because the longer the length of the CD, the more money you will make. 

But one thing for sure is that you will earn more money on a 6-month CD than on a savings account (more on this later).

Here’s how much you can earn with a 6-month CD rate.

Overview of the best 6-Month CD Rates: how much should you expect to earn.

The minimum balance requirement and the rates for these 6-month CDs vary depending on the bank. The rates range from 0.50% to 1.00%.

EmigrantDirect 6-month CD rate

The applicable rate for a six-month CD from Emigrant Direct is 1.00% . This six-month CD has a $1000 minimum deposit requirement. This is one of the highest interest rates out there.

MySavingsDirect 6-month CD rate

This 6-month CD also has a 1.00% APY and requires a $1000 minimum deposit.

Limelight Bank 6-month CD rate

The applicable yield for a six-month CD from Limelight Bank is 0.95%. It also has a $1000 minimum balance requirement.

BMO Harris 6-month CD rate

For a BMO Harris six-month CD, it is 0.80% APY and $5,000 minimum deposit.

Live Oak Bank 6-month CD rate

You can expect a 0.80% APY, But the minimum deposit can be high, $2,500.

Sallie Mae Bank 6-month CD rate

Sallie Mae’s 6-month CD offers a 0.90% APY and requires a $2,500 minimum deposit.

TIAA Bank 6-month CD rate

The minimum deposit can be steep for a six-month CD from TIAA Bank, which is $5,000. But a rate of 0.75% is still competitive.

Ally Bank 6-month CD rate

For an Ally Bank six-month CD, the rate is 0.65%. And there is no minimum deposit.

Bank5 Connect 6-month CD rate

The Bank5 Connect 6-month CD has the lowest minimum deposit requirement ($500) with a rate of 0.75%.

HSBC Direct 6-month CD rate

For a 6-month CD from HSBC, the yield is 0.75% and the minimum deposit requirement is $1,000.

PurePoint 6-month CD rate

The yield for this six-month CD is 0.50%  and the minimum deposit is $10,000. This deposit requirement can be too much for most people.

Why should you invest in a 6-month CD?

Given that these banks’ 6-month CD offer competitive rates, they may be a good option for you.

So, you may want to consider them for the following reasons:

Emergency fund. A 6-month CD is a good place for your emergency fund. However, if an emergency occurs before the CD matures and you withdraw the money, a penalty will apply.

Saving for a down payment. A 6-month CD is a good option if you’re thinking of buying a house in the next six months.

It’s a good place to accumulate and grow the down payment. You certainly don’t want to risk your money investing it in the stock market, because the market can plunge in a relatively short of time.

Wedding. If you have an upcoming wedding, a six-month CD is a good place to keep your cash.

Vacation. If you’re planning of taking a vacation in 6 months or so, a 6-month CD makes the most sense. Your money is safe and you’ll earn interest at the same time.

CDs vs. savings accounts vs. money market funds

While a 6-month CD can be a good option for your money, it may not be the best options in all situations.

If you need your money before the stated period and withdraw it, you will get hit with a penalty.

So, it makes sense to see what other options are available to you. And the best way to do so is to compare a 6-month CD rate with other saving vehicles.

6-month CD vs. savings account

There is no doubt you’ll receive a higher return on your money with a CD than with a savings account.

However, a savings account is more liquid than a CD. You can withdraw money in your savings account with no fear that you’ll get hit with a penalty.

With a CD, however, an early withdrawal penalty will apply if you need access to your money before the CD becomes “due.”

6-month CD vs. money market fund

It’s likely that you will earn more interest on your money with a CD than with a money market fund.

However, just like a savings account, you can easily access your funds in your money market fund at any time without the early withdrawal penalty that comes with taking money out of your 6-month CD before it matures.

You can write a check or you can call the fund company and ask them to transfer your money to your bank.

The bottom line

6-month CD rates are competitive. A six-month CD can be a good choice if you’re saving for a short-term goals. You’ll earn a higher rate on a 6-month CD than on a savings account.

Speak with the Right Financial Advisor

  • If you have questions about your finances, you can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc).
  • Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
CIT Bank Money Market 1.00% APY Review
CIT Bank Savings Builder 0.95% APY Review
CIT Bank CDs 0.75% APY 1 Year CD Term Review
CIT Bank No Penalty CD 0.75% APY Review

The post 6-Month CD Rates: Earn More Money appeared first on GrowthRapidly.


How To Get Free Stock: 10 Companies That Will Give You Free Shares

There are quite a few ways to get free stock. This article will look at 8 companies that are offering free shares and cash bonuses to new investors.

The post How To Get Free Stock: 10 Companies That Will Give You Free Shares appeared first on Bible Money Matters and was written by Lorraine Smithills. Copyright © Bible Money Matters – please visit for more great content.


Origin Investments Review

What is Origin? How does crowdfunding work? Is crowdfunding for real estate safe? How does crowdfunding for real estate investment work.

The post Origin Investments Review appeared first on The Dough Roller.