You're zealous about saving. You check your account balances regularly and plug in numbers on those online retirement calculators that promise to deliver the magical dollar amount you'll need to toss away your briefcase.
But wait: A New York-based research and consulting firm says those retirement planning calculators just don't add up. Corporate Insight found wildly varying projections on what a hypothetical investor's post-retirement income could be. In fact, that variation was substantial.
Using six calculators from traditional 401(k) record keepers and six from non-record keeping companies, Corporate Insight designed a profile for a hypothetical 40-year-old single architect earning $100,000 a year who has saved $100,000 in his 40(k). Based on that information and other details, the calculators spit out a wide range of monthly income projections, from $6,013 to $3,772.
This proves, experts say, that you shouldn’t depend solely on an online calculator’s projection.
"Nothing is more dangerous than false confidence," Andrew Way, a senior analyst at Corporate Insight, told CNBC. "This [output] should give you an idea of where you are, but don't take it as 100 percent set in stone."
The variations are due to the fact that not every calculator uses the same assumptions. Betterment's Retirement Savings and TIAA Retirement Advisor calculators, for example, were the only two programs to consider taxes. Calculators also had their own methods for figuring out income replacement ratios, salary growth, inflation rates and taxes. The Principal assumed the hypothetical architect wanted to replace 85 percent of his income in retirement, while MetLife figured on a 60 percent income replacement goal.
So what can you do to make sure you're on track for retirement? Simple. Get advice from a human.
"These [calculators] are a good starting point, but they're not a replacement for a financial planner," Maria Bruno, senior investment strategist at Vanguard, told CNBC. "Take these tools with a grain of salt: They're interactive and simplistic,. They start that dialogue with your planner."