New Pension Calculator Shows Monthly Deposits Needed to Reach Retirement Income Goals

A new pension calculator tool helps users determine the monthly deposit required to achieve their desired retirement pension. Unlike traditional calculators that start from monthly contributions and estimate future pension, this tool begins with the target monthly pension and works backward to calculate the necessary monthly savings. This approach suits individuals who have a clear retirement income goal and want to translate it into actionable monthly deposits.

The calculator is especially useful for young savers, self-employed individuals without employer contributions, and those who discover their current savings plan is insufficient. It converts the desired pension into a total savings target by multiplying the monthly pension by a conversion factor, currently averaging 200. For example, a monthly pension goal of 10,000 shekels requires a savings accumulation of 2 million shekels by retirement.

Using an example of a 35-year-old aiming for a 10,000 shekel monthly pension at age 67, with an assumed 4% annual return and no current savings, the required monthly deposit is about 2,570 shekels. If the saver already has 200,000 shekels saved, the monthly deposit needed drops to approximately 1,650 shekels. The tool highlights the significant impact of starting early, as delaying savings by a decade can double the required monthly deposit.

The calculator also translates deposits into a percentage of salary, helping users assess if their current contributions are adequate or need to be increased. It allows users to evaluate the cost of raising their pension goal, for example, increasing the target pension from 10,000 to 12,000 shekels raises the savings target by 400,000 shekels and adds several hundred shekels to monthly deposits.

Users are advised to set realistic pension goals considering inflation and the National Insurance old-age pension, which reduces the private savings needed. The calculator’s results are a starting point, as changes in conversion factors, returns, or retirement age will affect required deposits. Annual reviews against pension statements are recommended to stay on track.