A basic retirement calculator is a program that you can find for free on the Internet. This calculator will take your current retirement savings information, let you factor in things that will affect the final number and then tell you how much more you will need to save to be able to retire at the level that you want to retire at. Many people have difficulties understanding what a basic retirement calculator is telling them and they do not understand the numbers its spews out back at them. In a nutshell, a basic retirement calculator is nothing more than at guessing machine that takes your current conditions, puts in a giant guess for future trends based on current conditions and then it tells you that there is no way you will be able to retire.

The challenge is that a basic retirement calculator works in today's dollars. As an example, let's say you want to retire twenty years from today. And you want to know how much you'll have to save to have the equivalent of $4000 per month in twenty years from now. The basic retirement calculator will even go so far as to tell you how much per month that $4000 in 2008 needs to be to give you an equivalent lifestyle in 2028. Basically this whole thing it is just a huge guessing game and just another tool for the financial adviser to use to scare you into giving them as much as your disposable income as possible and then some. In some ways, if you look at history and the facts, you may want to keep some of your own money and live for today.

No One Knows How Money will Change

Going back in history, there were major stock market crashes that affected millions of people in the 1920's, the 1970's, the 1980's and the 2000's. During those market crashes, millions of people lost their entire life savings. The big .com crash back in the early 2000 affected many people who were trying to "save for their retirement." To put things in perspective, a new car back in the 1940s

cost between $600 to $700 on average. Today, sixty years later, that price has risen over 2700%, to over $16,000 for a new car. So when you factor in inflation, between 4% to 5% annually would tend to be on the low side. Between 1979 and 2000, the average Americans salary only one up by 11.5 cents per hour per year. The basic retirement calculator does not factor those numbers.

When it comes to retirement, many people avoid reality. But the facts are that it cannot be avoided. Probably one of the best ways to save for your retirement is to invest in things that grow in value over time and avoid things like the stock market. If you by real estate in your 20s or 30s, chances are that by the time you're in your 60s, the appreciated value will provide you with a nice retirement. You will have both equity as well as rental income.