Retirement planning is an important part of personal financial planning. Retirement planning involves defining retirement income needs and the lump sum of capital needed at retirement to generate that income. To build up that lump sum you will need to invest for your retirement on a regular basis, probably monthly. Sometimes the monthly savings need is more than you can afford to budget for at the present time and you'll need to work up to it.
Decide how much retirement income you'll need. You'll want to settle on the amount of after-tax annual income you'd like to live on in your retirement.
Select a retirement planning calculator. There are many calculators available online. Most will ask you for your age, income, desired retirement age, and retirement income needs from Step 1.
Select a rate of return. All cash flow and savings projections require a projected rate of return for your investments. It is commonly recommended to use a number between 6% and 8%.
Enter the required data into the calculator. The calculator will build a cash flow model that will calculate your retirement savings needs.