My Retirement Overview: Calculation Assumptions
The calculations in My Retirement Overview are based solely on information provided by the user. All examples, if any, are hypothetical and for illustrative purposes only and do not represent current or future performance of any specific investment. No representations, warranties or guarantees are made as to the accuracy of any estimates or calculations. Neither Voya Retirement Insurance and Annuity Company nor Voya Institutional Plan Services, LLC shall be liable for any damages or costs of any type arising out of or in any way connected with your use of this calculator.
The information provided in My Retirement Overview does not serve, either directly or indirectly, as legal, financial or tax advice and you should always consult a qualified professional legal, financial and/or tax advisor when making decisions related to your individual tax situation. All investments carry a degree of risk and past performance is not a guarantee of future results. Generally speaking, the greater the return, the greater the risk.
The retirement and paycheck calculator analysis in My Retirement Overview utilizes generally accepted financial calculations, as well as requirements set forth by FINRA. In addition, My Retirement Overview adheres to applicable industry standards as published in the Retirement Income Industry Association’s (RIIA) Statement of Principles.
General Retirement Assumptions
- The calculator illustrates retirement needs for a single person. It does not take into account spousal or beneficiary information.
- Monte Carlo probability analysis, which considers the volatility of investment returns over time, is not used in the analysis.
- Contribution inputs may include pre-tax contributions, pre-tax Age 50 catch-up contributions, Roth contributions, Age 50 catch-up contributions, and after-tax contributions. Availability of each contribution input is determined by the plan.
- If a user is age 50 or older, an additional catch-up contribution input is made available (unless such inclusion has been restricted by the plan).
- Contributions per paycheck are assumed to be made at the beginning of each pay period and increase annually at a rate equal to the salary increase rate entered by the user. The calculator assumes that no additional contributions are made after retirement.
- Profit sharing contributions (if applicable) are assumed to be recurring and apply to each year from now up to retirement age. Contributions provided as a percent of salary increase annually at a rate equal to the salary increase rate entered by the user. Contributions entered as a dollar amount are assumed to remain constant each year.
- Mandatory employee and/or employer contributions (if applicable) entered as a percent of salary increase annually at a rate equal to the salary increase rate entered by the user. Contributions entered as a dollar amount are assumed to remain constant each year.
- Contribution amounts are constrained by the lesser of plan and IRS limits.
- Neither Federal nor State income taxes have been factored into the retirement illustration.
- The Assumptions button on the Retirement Income Graph Screen documents values used for calculations.
Social Security Benefits
Social Security benefit estimates (if applicable) are based on the Social Security Administrations Primary Insurance Amount table which defines Social Security retirement benefits at the normal retirement age. The user’s salary history is not available; therefore the calculator approximates a salary stream based on current salary and anticipated salary increase.
Benefits are assumed to increase by a cost of living adjustment equal to the inflation rate entered. The calculator does take into account adjustments to monthly Social Security benefits due to early or delayed retirement. Due to the complexity of calculating future benefits, these are merely estimates that provide a general range of benefits. More precise benefit estimates are available from the Social Security Administration and can be entered by the user.
Users who participate in a public retirement system can receive a benefit estimate based on information they provide. Retirement system benefit estimates (if applicable) are generated by Still River Retirement Planning Software, Inc., an independent, unaffiliated third-party. Estimates for educational and governmental employees are based on publicly available retirement system data and are deemed reliable but are not guaranteed. More precise benefit estimate may be available from the user’s employer. Users who participate in private retirement system can manually enter their benefit estimates into the calculator. Pension benefits entered as a future lump sum are added to the Retirement Account Balance and are not reflected in the Retirement Income Graph as a pension value.
Retirement Income Graph
For each year of the illustration, the graph illustrates Retirement Need less Retirement Income Sources, where the potential retirement income sources are Social Security, Pension, and Retirement Plan Assets. A gap or shortfall exists if the Need exceeds the available sources. The Needs and available sources for any year can be viewed by moving the mouse over the graph. The graph does not illustrate the presence of a surplus.
When determining a suggested contribution amount that will potentially eliminate a retirement income gap, the calculator takes into account other income sources such as Social Security, Pension, and existing retirement assets. It also takes into account the stated retirement income need, and all other personal assumptions such as current age, retirement age, and years in retirement.
General Paycheck Assumptions
- State withholding calculations are updated annually, as well as ad hoc based on individual states.
- Contribution input fields can include pre-tax contribution, pre-tax catchup contribution, Roth contribution, Roth catchup contribution, and after-tax contribution. Availability of each contribution input field is determined by the plan.
- If a user is age 50 or older, an additional catchup contribution input field is made available (unless such inclusion has been restricted by the plan).
- Per paycheck contribution amounts are constrained by the lesser of plan or IRS limits.
- Pre-tax reductions reduce the user’s gross income (i.e. taxable income). Mandatory contributions to a defined benefit retirement system are assumed to be pre-tax reductions.
- After-tax deductions reduce the user’s take home income.
- The calculator displays the user’s current contributions and then compares them to an increased pre-tax contribution of 2%, 4%, and 6% provided the increased contributions do not exceed plan or IRS limits.
- Accumulation estimates are based on an assumption that contributions continue for 10, 20 and 30 years at the assumed pre-retirement rate of return. Contributions per paycheck are assumed to be made at the beginning of each pay period and increase annually at a rate equal to the salary increase rate entered by the user. The calculator assumes that no withdrawals are made during the accumulation period.
- Actual deductions and take-home pay may differ due to withholding method used by your employer.