January 24, 2009
What software do you recommend for retirement planning?
jhcalgirl asked:
What formula should be used to ascertain if your investments will hold out and how much to budget for retirement?
Macey
What formula should be used to ascertain if your investments will hold out and how much to budget for retirement?
Macey
Comments on What software do you recommend for retirement planning?
There are many on-line calculators that can help you with this. In the August 2007 issue of Kiplinger’s recommends that you use one that is based on a Monte Carlo simulator. They reviewed 5 different ones. I’ve used the ones at Financial Engines and MoneyChimp and found them very helpful. As the name implies a Monte Carlo simulator, does not give you a fixed answer but rather it gives your odds of success and, in the case of MoneyChimp, shows a graph of the number of years into retirement your IRA/401/etc should last. MoneyChimp also explains, in more detail than most of us would want to know, why a Monte Carlo simulator is required and how it works. These details are likely only useful to those with higher mathematical interest.