If your employer or ex-employer offers any retirement benefits, find out the amount you are likely to receive and enter the monthly sum expected. If that payment will increase to cover inflation, then mark the 'inflation adjusted' box. Most employers will provide a projected benefit statement on request. If you are married and your spouse will also be receiving retirement benefits at some point, enter his or her monthly payment separately. If you are divorced, find out if you are entitled to any benefits from your ex-spouse's plan.

For the average retiree, Social Security has been providing about 35%-40% of their pre-retirement earnings. Provided you've been working for enough years, you can go to www.ssa.gov/estimator to get an estimate of your benefits. If not, call the Social Security Administration at 1-800-772-1213 to see if they can provide a free statement of your estimated benefits, and then learn the rules involved by going to www.socialsecurity.gov. If you are married, enter the information for each of you separately. If you are divorced or your spouse is deceased, and you were married for enough years, you may have a choice between your own benefits or 50% of your ex-spouse's benefits, which may be higher. If you have any questions on this, call the Social Security Administration and ask for help in determining whether this might apply and what to do. Fill in the amount(s) per month expected at retirement. If the amount comes from www.ssa.gov/estimator, their estimates are given in today's dollars and will be automatically adjusted for inflation each year by the Social Security Administration. If you get your estimate from any other source, be sure to enter it in today's dollars as the retirement calculator will assume the number is adjusted for inflation. As to when you expect to begin drawing Social Security, I would, for now, use the age at which you are entitled to full benefits. As you approach the date at which you can choose to take partial benefits early, you can make your final decision whether to start collecting then, to wait for full eligibility, or even to delay past that date. Most people will find that starting on the date of full eligibility is probably the best way to go. Lastly, I repeat my caution that you should expect Social Security benefits to be tied to (indexed to) your income in the not-too-distant future. If you expect to have a substantial retirement income, I would plan on receiving a lot less than the projected amounts. If you're unsure what number to use, consider entering half the amount that you are currently expecting to get, especially if you are not close to retirement.

List the current total of all of your retirement savings and the amount you plan to save/invest each month from this point on, including any company matching dollars. The retirement calculator will assume that you will increase the amount saved annually at the rate of inflation. If you expect to substantially increase the amount you are now saving to a much higher number within the next couple of years, use that higher number. The error introduced by doing so is likely to be quite small, so I wouldn’t worry about it. As for the expected rate of return, I recommend using no more than 8% for your expected rate of return from the stock market and 5% for fixed income. As for your rate of return after retirement, it should be a more conservative number; perhaps 6%. If you have a mix of stocks and fixed income, calculate the average rate of growth expected. For example, if you have 50% of your assets at an expected return of 7%, and 50% at 5%, your expected growth rate would be 6% percent. If some of your savings are not tax deferred, be sure to subtract the percent of the return lost to taxes to get an after-tax rate of return for this portion of your savings.

If you have any additional assets or investments (such as a business or other real estate) that you plan to retain or sell, enter that amount in today's dollars. The retirement calculator will adjust your number for inflation. For the rate of return expected, enter the net after tax rate. As for the equity in your home, if you plan to downsize, include in your calculations the amount expected to be freed up, again in today's dollars. Here's how: If your house is worth $275,000 if sold today, and you expect to have it paid in full by the time you retire, and you plan to downsize to what is today a $200,000 condo, the difference of $75,000 (in today's dollars) becomes your "other asset." As residential real estate historically appreciates at the rate of inflation, I suggest using that rate, about 4%, as your expected rate of return for this example. If you do not plan to downsize or become a renter at some point, I recommend excluding your home equity in your calculations and letting it serve as a source of last resort emergency backup money.

Decide whether either you or your spouse will continue working in retirement on a full- or part-time basis, for how many years you expect to do so, and the amount you expect to make per month. Enter that information in today's dollars; the retirement calculator will automatically adjust that number for inflation. As you look at this option, don't limit your thinking to working only for others. Take some time to look around you. You will find the world is full of opportunities to make money on your own. Understand that things have changed when it comes to retirement. The old pattern of go to school, work, and retire is disappearing for most people. The new pattern is more likely to be go to school, work, and change jobs (maybe a lot), go back to school, work, retire, go back to work, and then maybe retire again. As I said in chapter two, "Your Goals and Dreams," this very often turns out to be a better quality of life.

Should you have income from any other source not covered above, enter the current amount per month and indicate whether or not that amount will be increased to adjust for inflation by marking the 'inflation adjusted' box.

Most people should plan on needing about 70%-80% of their current spending level after they stop working. Again, enter the amount per month in today's dollars; the retirement calculator will automatically adjust that number for inflation. To assist you in the estimation of your future cost of living, refer to the Spending and Savings Plan Worksheet on this site and consider how each of the items in your current budget will change in retirement. Be especially careful when estimating the cost of your health care insurance. To estimate your future health insurance costs you need to understand the benefits you are likely to get from Medicare and the costs involved. Go to www.medicare.gov, which will give you a pretty good rundown. You should expect Medicare costs to rise far faster than inflation over the years to come. I would use at least 40% more than the premium amounts people are currently paying under Medicare as your input ("today") cost. The same holds true for private health insurance. Also be sure to account for the issue of long-term care in your plans, with either a policy or a family circumstance you are confident you can count on at some point in the future. Most people should be purchasing long-term health care insurance at some point in their fifties. In chapter thirteen, "Choosing Insurance," this subject is covered in detail.

Over a 50 year span, inflation has averaged 4.1%, 3.2% over the last 25 years. We have recently been in a period of low inflation and many factors point to a very high probability of above average inflation going forward. Given this, I recommend using an inflation rate of no less than 4.5%. going forward. Should you wish more input on why I am recommending a higher than normal rate see the Market Evaluation section write-ups for Right Now and for the Fixed Income Market. For your retirement tax rate for your non-earned income (income from other than working), hopefully you will not have to pay anything in the way of Social Security and Medicare taxes on that income. You must expect, however, that regular income taxes will be somewhat higher in the future. Federal rates are at their lowest level in decades and the now-massive federal deficit points to having to pay higher taxes in the future. For these reasons, I would calculate your retirement tax rate as follows: Say you expect to need $60,000 per year to live on, and need to make $78,000 today to net that amount after taxes. Assuming that your current Social Security/Medicare taxes are about $6,000, the remaining $12,000 is your income tax. That's an overall income tax rate of 15.4%. To be safe, I'd add at least 5% more to cover the higher rates in the future. For this example, you would get an assumed rate of 20.4% after retirement, including the money you draw from your tax-deferred accounts. Also, if you plan on working after retirement, be sure to check the rules regarding how much you can make, before you will be required to pay additional Social Security/Medicare taxes. * Special note to those that expect to be building a sizeable ROTH IRA: It's okay to lower your retirement tax rate a little to account for this circumstance.