via Wall Street Journal
That online retirement planning tool just might be hazardous to your financial security in later life.
A new academic study of 36 such tools—many of them widely used—concludes that “in most cases, the available offerings are extremely misleading” and generally not helpful to consumers trying to figure out if they will have enough money to cover their expenses for the rest of their lives.
The study was conducted by three researchers at Texas Tech University, including well-known financial adviser Harold Evensky,and a fourth researcher from Utah Valley University. They looked at the guidance the various free and low-cost calculators provided to a hypothetical couple in their late 50s earning $50,000 each and aiming to retire at ages 65 and 63.
Using software for financial advisers by MoneyGuidePro, the researchers concluded that the couple has only a 53% probability of having enough money—which they termed “a less than acceptable probability of a successful retirement.”
