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Retirement planning is an important but often daunting task.  Retirement planning includes creating a budget, estimating expenses, and deciding on income sources.  Not something you may want to do after taking care of patients.  One shortcut often considered is to use a retirement income calculator.  While seemingly helpful, these can sometimes present problems. In this article, we’ll explore common challenges nurses might face when using a retirement income calculator and how to overcome them.


The Appeal of a Retirement Income Calculator

Retirement income calculators have gained popularity in recent years because of their convenience. They promise to simplify complex financial planning by providing quick estimates of how much money you need for retirement. These tools are easily accessible and seem like a lifesaver for those with busy schedules, like nurses.  But retirement income calculators may present the following challenges to your plan.


While a retirement income calculator offers convenience, it may oversimplify your finances. Retirement income calculators often make assumptions based on averages.  This may not accurately reflect your unique circumstances. These averages can lead to unrealistic expectations and potentially poor retirement planning.

Ignoring Healthcare Costs

Nurses have unique retirement needs. They often deal with physically demanding work, which can lead to health issues later in life. Retirement calculators may not account for these potential healthcare costs, leaving nurses ill-prepared.

Variable Income

Nursing often offers variable income.  Your income may include overtime, shift differentials, and bonuses throughout your career. This variation may be difficult to use with a retirement income calculator.  Retirement calculators typically work best with stable incomes, making it challenging for nurses to get accurate estimates.

The Dangers of Relying Solely on a Retirement Income Calculator

Overreliance on retirement income calculators can be risky. You might want to base your entire retirement plan on these tools.  But doing this may overlook other important parts of your retirement plan.  Let’s explore the dangers of relying solely on a retirement income calculator for your future.

Ignoring Savings and Investments

Retirement planning isn’t just about basic income; it’s also about all sources of money.  These include savings, annuities, and investments. Relying solely on a retirement income calculator may cause you to neglect to plan for these important sources.  This may lead to outliving your money in retirement.

Ignoring Taxes and Long-Term Care

Taxes and long-term care may be your largest expenses in retirement, depending on your unique situation.  And a retirement income calculator may exclude these costs because the date you enter is your best guess.  It may be difficult to know these costs in retirement.  Guessing may give you inaccurate results which might cause less savings for these expenses.

Ignoring Estate Planning

Like ignoring taxes and long-term care, a retirement income calculator doesn’t allow for estate planning.  This means your plan may ignore leaving money to care for a dependent or covering your estate taxes.

Unrealistic Return Assumptions

Retirement calculators often assume a consistent rate of return on investments. They may also include an industry-standard safe withdrawal rate.  But these may be unrealistic.  Inflation and the rise and fall of financial markets may lead to inaccurate assumptions.  This may cause you to underestimate your retirement funds.

Using a Retirement Income Calculator for Optimal Results

Retirement planning can be a daunting task, but it’s important to start early and have a solid plan in place. As a nurse, you have unique retirement needs and considerations.  A retirement income calculator may help you plan but use one with caution.  Here are some points to consider.

Consider Your Goals and Budget

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Like nursing, retirement planning starts with assessment.  Before using a retirement income calculator, consider your lifestyle goals.  For example, do you plan to travel, pursue a hobby, or start a business?  Estimate these costs for your retirement budget.  Compare your current and retirement budgets to get a percentage of what you may need in retirement.  Most calculators recommend using 70% to 80% of your current income for retirement.  This is because most likely you’ll have fewer expenses in retirement like, a mortgage or childcare costs.  But other expenses may increase like healthcare and long-term care costs.  Aim to include all retirement expenses in your budget.  Consider speaking with a Financial Advisor to help you include all expenses in your retirement plan.

Consider all Sources of Retirement Income

To estimate your retirement income, consider all sources including Social Security, annuities, pensions, and retirement savings accounts.

Enter Accurate Data

Once you know your budget and income sources, you’re ready to enter your data into the calculator.  Many retirement income calculators use the same data.  This data often includes:

  • Current Age
  • Current Income
  • Spouse Income
  • Current Retirement Savings
  • Desired Retirement Age
  • Number of Years in Retirement
  • Inflation Rate, consider at least 3%
  • Replacement Income Percentage, consider 70% to 80%
  • Pre-Retirement Investment Return Rate
  • Post-Retirement Investment Return Rate
  • Social Security Information

Create a Retirement Savings Plan

Once you have your budget and you know the percentage of retirement income you’ll need, consider using a retirement income calculator to give you a baseline amount.  The retirement income calculator will produce a total.  While this number may seem overwhelming, consider the following ways to save for retirement:

Employer Retirement Plans

Many employers offer a retirement savings plan.  Your employer may offer a contribution Plan like a 401 (k) or 403 (b) or a Pension.  Your Human Resources department can let you know if your employer offers a retirement savings plan.

Individual retirement account (IRA)

If your employer doesn’t offer a retirement plan, consider opening an IRA to save for retirement.  Many IRA accounts offer tax advantages.  Consider speaking with a Financial Advisor to see if an IRA fits your goals.

Health savings account (HSA)

An HSA can help cover healthcare costs in retirement.  Your Human Resources department can let you know if your employer offers an HSA.


An annuity aims to give you a guaranteed income in retirement.  A Financial Advisor can help you explore the pros and cons of an annuity to help you decide if one fits your retirement plan.

Monitoring Your Results

Once you know your retirement income needs and start saving, consider using a retirement income calculator to monitor your plan.  A suggestion is to use the same calculator each time for more accurate comparisons.


Retirement Income Calculator Image on www.drgeorgenecollins.comIn conclusion, retirement income calculators can be useful tools, but consider using them with caution.  Oversimplification, unrealistic assumptions, estimating, and lack of consideration for taxes, long-term care, and estate planning, may lead to underfunding.  A holistic approach to retirement planning includes balancing all income sources with expenses.  Given the complexities of retirement planning, consider speaking with a Financial Advisor.  A Financial Advisor can help you explore personalized solutions that address your unique circumstances and financial goals.

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Categories: Retirement Planning

Georgene Collins

Georgene Collins, RICP®, RN, PhD, MBA is a registered nurse turned Financial Advisor at Airey Financial Group. Georgene helps other nurses take control of their finances and prepare for retirement. Georgene began her career with Airey Financial Group in 2017 after retiring from 30 years in healthcare. Georgene holds the Retirement Income Certified Professional (RICP®) designation from The American College of Financial Services. She holds health and life insurance licenses and a long-term care certificate in Indiana and Illinois. Georgene is a Registered Representative and Investment Advisor Representative and has earned the FINRA Series 63 and 65 registrations.