Online Retirement Calculators: Helpful or Useless?

A columnist discusses the futility of determining "your number."

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Earlier this year, financial services giant ING began a television and print advertising campaign encouraging all Americans to calculate "Your Number," which refers to the amount of money you will need to comfortably retire. Almost half of workers have diligently tried to figure out exactly how much they need to save, according to an Employee Benefit Research Institute survey. And simply doing the calculation caused 44 percent of workers to save more, EBRI found.

While saving more for retirement is always good news, crunching the numbers can be a frustrating and demoralizing experience. Heather Havrilesky, Salon's television critic, chronicles her experiences trying to calculate how much she needs to save for retirement in an article posted today.

Havrilesky calculated that she and her husband will need to save $93,397.05 annually to reach their retirement goal. "Unbelievable. Why doesn't it just say, 'You're screwed. Prepare to toil away for the balance of your days on earth?' " Havrilesky wrote. "Toying with retirement calculators was so exquisitely painful and such a profound waste of time."

The last time I wrote about retirement calculators, I received a similar reaction from an anonymous reader. "What a waste of time. [The retirement calculator] told me I had to save over $700,000.00 this year!" the commenter wrote.

Granted, Havrilesky was aiming for a combined income of $80,000 a year for her and her husband, which is an extremely hefty retirement income. Retirees in most parts of the country can and do get by quite comfortably on far less. Havrilesky, 38, and many other gen X-ers and baby boomers who haven't saved enough for the retirement lifestyle they crave will have to face the unpleasant reality of working longer or consuming less in retirement, if not both.

Working a few extra years doesn't have to be painful if you can find a job that you like with the added bonus of some flexibility. (Havrilesky's current writing gig certainly seems to have both.) And downsizing to a smaller house once the kids have moved out, moving to an area with a lower cost of living (Havrilesky lives in pricey Los Angeles) once you don't have to commute to a job, and sharing a single car with your spouse are fairly pain-free ways to substantially slash expenses. You can also get by on a smaller budget if you pay off your mortgage, don't have a daily commute, and eliminate other work expenses like professional clothing and lunches out. Of course, health and other sudden expenses are always the wild card.

Tell us, do you find online retirement calculators helpful or a ridiculous exercise in futility?