If even one of the Top Ten Reasons to Retire is calling out to you, you better make sure that you have the right retirement calculator.

If you are worried about messing up your retirement plan, beware of the risks of using tools like the Yahoo financial retirement calculator or the TRowePrice retirement planner.

Did you read the headline about the heroic airline pilot: “Captain Sully Retires”? After Captain Sully saved the lives of all the people on board his jetliner by gently landing it on the Hudson River, he decided to hang up his wings. Whether you heard a news announcement that Captain Sully retires or whether you just downloaded the list of top ten reasons to retire, perhaps you’re getting into the mindset that you really must start to plan for your golden years.

When folks start to consider the possibility that they, too, can hang up their wings, they often turn to online retirement calculators. Some of the most popular ones are the Yahoo financial retirement calculator, the TRowePrice retirement planner, and the MSN retirement calculator. People then fill in a few fields about their age, income, expenses, and net worth, and with the click of a button, the website spits out an answer like, “You can do it!” or “Sorry, pal. Looks like you’ll be working until 95.” (Usually they’re a little more subtle in their answers, but that’s the bottom line.)

 Plan your retirementCredit: Image: Ambro / FreeDigitalPhotos.net

The problem with all of these online tools is not that they are inaccurate; rather, people generally don’t get the right information from the computers. Moreover, given the complexities of modern day life, there are often questions that the websites should ask, but which they don’t. On top of that, they don’t understand human nature. When you enter your “risk tolerance” as “aggressive,” “moderate,” or “conservative,” the computer will just assign a number to you. Those risk tolerance words are packed with feelings, emotions, historical interactions with the markets, discussions between husbands and wives, and so much more… far more than a checkbox on a website can understand.

As a financial planner, I use tools like the Yahoo financial retirement calculator, the TRowePrice retirement planner, and the MSN retirement calculator. Perhaps the software I use covers more intricacies of Wall Street financial planning models. But it’s not the written plan itself that is so important.

The two most vital parts of the plans are:

  1. The information-gathering discussion. In this discussion, whether you do it with only your spouse or loved ones, or whether you hire a professional, like a Certified Financial Planner, you need to look at everything that you have. Then you discuss your dreams and goals (like where you want to live – check out “3 Things You Need to Know About the Best Place to Retire in the World”). A good planner will help you stretch your imagination, but still keep you within the boundaries of reality. Can a computer inspire you like that? Doubtful.
  2. Interpreting the plan. Even if the online retirement calculator creates a snazzy-looking, pie-chart filled, number-packed report, will you really know what to do with it? And more, will you let the financial plan be an ongoing guide for you to always gauge your progress? People tend to do these plans, get excited for about a week, and then shelve them. (Does this sound as familiar as the number of diets that you have started and then stopped a few days/weeks later?) That’s human nature.

When I prepare a plan for clients, I tell them that the plan is more for me than for them. Sure, they will use it; but really, I use it as a tool to help them move along their path to financial freedom. If you are a real do-it-yourselfer, then you can benefit a great deal from the online retirement calculators. But if you’re afraid that when the top ten reasons to retire come calling to you that you may forget where you put that old plan, then make sure you have someone on the outside to encourage you along. Whether you choose a CFP, an investment advisor, a life coach, a spouse, or even a good friend, remember that retirement is a human stage in life, not something that can be left to the computers.

Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.