New Study Questions Retirement Planning Calculators’ Accuracy

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.”

Read the full article here

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About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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