PRC May Be the Simplest Retirement Calculator Available
by Stuart Matthews, Pralana Consulting LLC

What might seem simple can be deceiving.  The “simpler” a calculator appears to be and the “fewer” input fields a user has to complete, the greater the amount of math and “outside the calculator work” the user must perform to be able to provide the “simple” inputs.  Conversely, a calculator with rich data input capabilities and robust calculation capabilities is actually “simpler” for getting to quality results, and from that frame of reference PRC may be the simplest calculator available.  Using the Ultimate Retirement Calculator (URC) as a good example of a “simple” retirement calculator, I compared the amount of math it requires its users to do to the amount of math PRC requires its users to do and compiled the results in the table below.  Clearly, URC requires its users to do a lot of math.  Not only does this mean more work for the user, but it also increases the probability of errors. 

Calculator Input Fields

Math that URC requires its users to do

Math that PRC2015/Gold requires its users to do

Contributions to savings

Must figure average pre-retirement expenses and take the difference between this and total post-tax income

None: the tool takes the difference between total income and total expenses


Must enter net income, so this involves determining the taxability of Social Security income, determining effective tax rate and then figuring the taxes and subtracting that from gross income

None: Just enter gross income associated with each stream


Must determine a representative average post-retirement expense

None: Just fill in the separate expense line items

Tax Rate

Must figure a single number representing a long term weighted average tax rate for federal and state income tax and FICA tax applicable to the rest of your life

None for federal income tax and FICA tax: the tool calculates your taxes. 

State tax rate(s): determine your rate by dividing your state tax by your adjusted gross income.

Social Security Benefits

Must determine the actual benefit associated with the selected start age and then convert to net income.  This can get particularly cumbersome when doing what-ifs with different benefit start ages, and is worsened when spousal benefits are involved.

None: Just enter benefit at full retirement age(s) and start ages for each partner.  For what-if exercise, user simply changes the start age(s).

Rate of Return

Must figure a long term weighted average across regular, tax-deferred and tax-free categories

None: Research and enter separately for each asset class within the regular, tax-deferred and tax-free categories, with separate entries for two user-specified time periods.

Output Value in Current $

Must do a manual conversion to know if portfolio value is going up or down

None: the tool provide outputs in either future or current $.

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"Simple" Inputs