How to Estimate an IRA Value at Retirement
Planning for retirement is an important step in reaching personal financial freedom. Unfortunately, it can be hard to know how much to save and if you are going to have enough when it comes time to retire. With some basic information, an estimate of the future value of your portfolio can be obtained. From there, adjustments can be made to increase the chances that you will have enough money for a comfortable retirement.
Things You'll Need
 Quarterly statements from retirement accounts
 Estimated rate of return on accounts
 Risk tolerance profile
 Texas Instruments BA II Plus Calculator
Instructions


1
Determine an estimated rate of return on investments using risk tolerance.
One simple way of finding your account's potential rate of return is by completing a risk tolerance profile questionnaire. Several of these are available online. Some are based on time horizon and others are based on personal feelings about investing. A Risk Tolerance Quiz that covers both sides of the topic can be found at the MSN Money website. (See Resources 1) When you have finished the quiz you will be placed in one of five categories. From there you can determine a estimated rate of return based on your outcome. According to Theiracenter.com, estimated annual returns can be calculated as follows:
Conservative: 6.94 percent
Moderate conservative: 7.82 percent
Moderate: 8.93 percent
Moderate aggressive: 9.96 percent
Aggressive: 10.20 percent

2
Calculate future value with an online tool.
Using the information in your quarterly statements, you can find the current value of your accounts and the amount you are contributing annually. Taking that information, along with the estimated rate of return found in Step 1, and entering it into the online calculator at BankRate.com, a basic estimation can be tabulated. (See Resources 2) This estimate assumes your accounts are invested in a way that matches your risk tolerance profile.


3
Calculate future value with a financial calculator.
This method takes a little more work but also gives a more accurate estimate. On a Texas Instruments financial calculator, the following calculation will give you your estimate. This assumes a $0 starting value, $250 dollars a month in contributions, an 8 percent return and 25 years of investing. Letters in parenthesis indicate specific keys. For example, "(pmt)" represents the payment key.
0 (PV)
250 (PMT)
8 (I/Y)
25 (2nd) (N) (N)
(CPT) (FV)
Which shows a value of $237,756.60

4
Adjust your plan to fit your needs.
If the current plan doesn't look like it's going to fit your retirement needs, some changes may need to be made. Options include: retiring later to save more money; contributing more to your accounts; and lowering your financial needs into retirement. Any of theseor a combination of themcan go a long way toward helping you retire comfortably.

1
References
Resources
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