Calculated Surfing

One of the great things computers do is, well, compute. And thanks to the Web, you can tap into other people's computing prowess, which translates to a calculator for practically any task.

Want to find out how much that French hotel will cost you in dollars? Plug the euros into the calculator at XE.com, and you'll know in a second. And you can get what the Duo would call "incalculable" value from mortgage calculators. How much are you going to pay over the life of your loan? Is it better to get a fixed rate or a variable one? There are calculators all over the Net that can make short work of the problem.

Steve's got a few favorites, among them the collection at Financial Calculators, where you can check out things like the break-even point (that is, how long it will take you to recover the upfront fees) for refinancing your house. And you can easily answer questions like how much would you have to save to become a millionaire, and how much a million dollars would be worth by the time you save it.

The site has custom calculators that can tell you how long it will take you to pay off your credit card or mortgage if you make additional monthly payments. There's also a nice selection of inflation calculators that let you figure, for instance, college costs a few years down the road, figuring whatever inflation number is reasonable.

Of course, that word "reasonable" is key. It's important to recognize the old line about garbage in, garbage out. If you're doing a college-fund calculation and you base your saving on the idea that you're going to earn 20 percent on your investments every year--or on the idea that the college of your child's choice won't jack tuition more than a few dollars a year--you may find yourself scrambling when the acceptance letters start rolling in. You've got to make sure what you're entering makes sense.

It's also worth remembering that garbage out does not always require garbage in. Some of the retirement calculations Steve's seen are far too simplistic. They may ignore crucial factors like the taxes you'll have to pay on the money you withdraw from your retirement accounts, not to mention the way taxes can hit your Social Security payments.

Angela, of course, belongs to the generation that has no reasonable expectation of retirement and thus greets Steve's complaints with a shrug. But it is dismaying that not many of these calculators will save your work. There's nothing like spending half an hour entering data and discovering some error--yours or theirs--that blows it all away. For that reason, Steve likes the retirement calculator that comes with versions of Quicken. Since the program has a lot of your data already, you don't have to reenter nearly as much. And unlike just about every other retirement calculator he's seen, Quicken points out when you've got an asset you can sell--typically your house--to extend income late in your retirement.

Calculators can be great, agree the Duo. But be sure you understand their context before using them to make serious financial decisions.

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