In today's world, MarketWatch notes, financial professionals have access to countless sophisticated computer programs to help ensure accurate calculations, but at times, it is prudent for these professionals to do some simple "back-of-the-envelope" calculations to ensure that the computer findings are precise. The article references "financial professionals who use costly computer software without any idea of how the programs work or what assumptions are involved," and suggests, "You may need to be the person to make some back-of-the-envelope checks of computer results."

According to Equity Trust Company, complaints about inaccurate retirement calculations can often be resolved through simple math. "With just a couple simple calculations, you can track the effectiveness of your retirement savings," the company affirms. "With today's myriad of retirement suggestions and advice, often an investor's own tracking is the most effective."

Equity Trust Company continues, complaints about retirement planning are especially common among retirees, but there are some simple calculations that can help retirees ensure that they are not spending more money than they can afford.

At the very least, MarketWatch says, retirees can calculate the basic amount of their Social Security earnings, the adjusted value of their pension, and the total amount of their savings. "This analysis should be done each year," the article states.

There are also some helpful back-of-the-envelope calculations available to pre-retirees. As the article makes clear, these calculations can be more difficult and complex. In particular, pre-retirees must calculate how much additional income they will need from their savings, to augment Social Security earnings. The MarketWatch article offers some specific calculations for pre-retirees seeking to figure how much they need to save annually.

Another question addressed is how much a person should save in his or her emergency reserves. "This is a question without a perfect answer," the article states. "None of us can foresee the uninsured emergencies we'll encounter." However, the baseline answer is between five and 10 percent of a savings balance.

ABOUT:

Equity Trust Company is the country's leading provider of self-directed IRAs and 401(k)s, with more than 130,000 clients in all 50 states and over $12 billion of retirement plan assets under administration. The Company believes in self-directed retirement accounts as ideal vehicles for generating long-term wealth, as they allow investors the freedom to invest funds as they determine. At Equity Trust Company, concerns about restrictive conventional retirement programs are commonly heard, and the Company responds to these complaints by providing information about the alternatives available through self-directed programs.