Personal FinanceDC Studio / Shutterstock.comAaron WebberThis post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive
compensation for actions taken through them.Can you trust the websites and tools that project your retirement savings into the future? How accurate can those predictions be? How can these tools take so many unknown factors into account and give an accurate prediction of your retirement? If you’ve wondered this, you are not alone.
Online calculators can be useful to give you a ballpark estimate of your retirement savings.
These tools don’t take inflation into account, so your savings will have less purchasing power in the future.
Retiring early is possible, and may be easier than you think. Click here now to see if you’re ahead, or behind. (Sponsor)
One person thought that the online predictions for his retirement were too high, or too aggressive. They took their questions to the people in the r/personalfinance community to see if they could offer any insight into what he was seeing. This is what they said.Please keep in mind that all the comments in the original thread, and in this article, are opinions, and are not legal financial advice. You should always speak to an expert before making any big financial decision. The QuestionThapana_Studio / Shutterstock.comSaving for retirement.The author of the original post says that they are 29 years old with around $45,000 in their 401(k) account. Since they opened the account in 2018, they have seen a 9% return. They currently make $83,000 per year and the company matches 100% up to 4%. They currently contribute 10% to the account.However, when looking at different calculators and tools online, they estimate they will have between $4 and $4.5 million by the time they turn 65, which they think seems way too high based on current contributions. They don’t have any information to say otherwise and don’t know how they could prove if the numbers are reliable or not. The Community ResponseLane V. Erickson / Shutterstock.comA photo of retirement savings.Most of the people who responded agreed that the numbers could be accurate, but there are a couple of things the author needs to keep in mind.First, these are projections based on today’s numbers and historical precedent. They will not take into account any major event that might take place that can affect the account. However, as your retirement date grows closer, the window of uncertainty will narrow until it becomes a near-perfect projection immediately preceding retirement.Second, online tools typically don’t account for inflation, and what that does to your spending power in the future. All the projections are going to reflect your savings in toda