Richard Cox

While some local financial advisers say retirement calculators appeal to a “fast food” mentality, most agree the online tools are a good place to start when planning for retirement.

“The retirement calculators, I feel, are there to give you a broad view of where you stand,” said Jonathon Ransom, a financial planner for First Tennessee in Chattanooga.

And while that one-size-fits-all approach to retirement planning is a great jumping-off spot for many people, Mr. Ransom said the calculators have limitations, such as assuming a certain rate of return on investments or not accounting for taxes and inflation.

The calculators tally how much an individual will need for retirement by asking users to enter information about their personal finances such as current income, current retirement savings and the percent of income contributed to their retirement plan.

After all of the information is typed in and calculated, the user is given an assessment of their retirement plan, usually displayed in the form of a chart or graph.

“(The calculators) not going to be specific because they can’t be for each individual,” he said. “They are hoping they get a million hits, so you can’t possibly tailor it to each individual in that way, but they do an OK job of giving a broad view of where you stand at that point.”

Mr. Ransom said people should know the calculators are going to assume a constant rate of return on their investments that is just not going to happen in real life.

But the calculators are a good place to start, said Richard Cox of Cox Wealth Management.

“They are going to get you to think, ‘I need to do something,’” he said.

For baby boomers or those preparing to retire in the next few years, financial advisers said it may be too late to get the full benefit of using a retirement calculator.

“My fear with older folks, somebody that is near retirement, is they may get overwhelmed by the amount of savings that the calculator says they have to do to reach their goal,” Mr. Ransom said.

But for younger people they can be useful tools and help them put things in perspective.

“The good thing about them is they can encourage people to save,” Mr. Ransom said.

Jim Nelson, a financial adviser with Edward Jones Investments in Athens, Tenn., said his company launched a retirement calculator in the past year, and he said his clients have liked having access to it.

“It has really made a professional picture (for) the client, for a person who has a way to go in saving, and wants to know what is going to happen down,” Mr. Nelson said. “So we’re real pleased with that.”

He said the online calculator also gives people who visit the Edward Jones Web site access to other tools including a life expectancy calculator.

Mr. Cox said people should remember the limitations of “canned” solutions like retirement calculators and other online tools.

Mr. Ransom agreed, and also said the calculators are not all bad, especially if the user knows what he or she is getting.

“They are good at giving you an idea of where you are, but they can’t tell the future any more than the rest of us can,” he said.

calculator sampler

A sampling of Web sites with retirement calculators:

aarp.org

socialsecurity.gov

bloomberg.com

www3.troweprice.com

edwardjones.com