What is a retirement calculator and how does it work?

A retirement calculator is a tool that helps individuals estimate how much money they will need to save for retirement and how much they can expect to have in retirement based on their current savings, contributions, investment returns, and other factors. The calculator takes into account a variety of inputs, such as age, current income, expected retirement age, current savings, expected retirement expenses, and expected investment returns, to generate a projection of retirement savings over time.

The calculations are typically based on a set of assumptions, such as inflation rates, investment returns, and life expectancy. The calculator then provides an estimate of how much money an individual will have saved for retirement, how much they can expect to receive in retirement income, and how long their retirement savings are likely to last.

Retirement calculators can be very helpful for individuals who want to plan for their retirement, as they provide a clear picture of what they can expect in terms of income and expenses in retirement. They can also help individuals adjust their savings and investment strategies to meet their retirement goals.