401K Calculator

[Philcjr]

Hello All,

This posting is to share some work I recently did when trying to locate an Excel 401K Calculator. I searched the web to find such a thing with no luck and what I did find, people wanted $$$$ for it.

Anyway, I post to share and welcome ANY suggestions, comments, critiques from my fellow VBAXers

It shows that it really pays to start saving early on for retirement.

Oh ya, those numbers in the file are not my data, have fun...

Phil

[matthewspatrick]

Phil,

Some notes:

1. Current US law limits contributions to $15k/year (with a $20k or so limit for folks over 50 or over 55). Your tool is allowing contributions over that limit. The limit is indexed to inflation
2. You should specify that ending balances are in either real (post-inflation) or nominal terms. I would recommend that you label everything as real (and thus sidestep the indexing of contribution limits)
3. 15% is a bad default setting for expected return, either way. For the past hundred years, the average inflation-adjusted return on stocks, after reinvesting dividends, is 7%-8%

[Philcjr]

Patrick,

Thanks for your comments

Issue #1 - Totally forgot about that one... good catch
Issue #2 - Good point
Issue #3 - How right you are, I was just playing around to make sure the charting worked... I think I wll have the fields empty out upon opening the file/setting them to zero

Thanks again for your comments

Phil

[matthewspatrick]

You're welcome, Phil. Good luck with the project.

Compound interest is a truly magical thing.

Almost forgot... the vogue these days for retirement planning calculators is to include some form of Monte Carlo simulation. It's a good idea because it can show you the potential "extinction risk" on your portfolio, as well show the probabilities of various ranges of outcomes.