Reason #1 Why Our Simple Retirement Calculator Is Better — It Counts Valuations
The historical stock-return data shows that the single biggest factor determining whether a retirement plan works or not is the valuation level that apply on the day the retirement begins. But the Retirement Risk Evaluator is the only retirement planning tool available free on the internet that contains an adjustment for the valuation level that applies on the day the retirement begins. That means that this is the only calculator that you can use to put together a retirement plan that provides accurate numbers!
Reason #2 Why Our Retirement Planning Calculator Is Better — It Shows the Benefits of Non-Stock Asset Classes
When valuations are not considered, stocks always look to be the best choice for your retirement money. But stocks are often not best. When stock price are insanely high (as they were from 1996 through 2008) super-safe asset classes like Treasury Inflation-Protected Securities (TIPS) and IBonds often offer a better deal. You need to know that to put together an effective retirement plan.
Reason #3 Why Our Retirement Planning Calculator Is Better — It Offers Option Other than the “Die Broke!” Approach
Most of today’s retirement planning tools show what withdrawal rate you may take presuming that you are okay with the idea of seeing the value of your retirement portfolio diminished to zero over the course of 30 years. We do that too. But many consider that a dangerous assumption. What if you live longer than you expect? Our online retirement planning calculator permits you to use the “Die Broke!” option. But it also permits you to see what the numbers are using an assumption that your portfolio balance will not diminish over time or will be diminished only in part.
Reason #4 Why Our Retirement Planning Calculator Is Better — The Principles Employed Have Been Endorsed by Big-Name Experts
A good number of big-name investing experts have pointed out the deficiencies of the “Old School” retirement calculators (our calculator is the first “New School” retirement planning tool) in recent years. William Bernstein, author of The Four Pillars of Investing has said that anyone planning to use one of the conventional safe-withdrawal-rate (SWR) studies to put together a retirement plan would be well-advised to “FuhGedDaBouDit!” Larry Swedroe, author of The Only Guide to a Winning Investment Strategy You’ll Ever Need, described the safe withdrawal rate studies that are the engines of most other calculators as “Garbage-In, Garbage-Out” research. Ed Easterling, author of Absolute Returns, said: “The likelihood of financial success in retirement is considerably less than most pundits are advocating.” Our simple retirement calculator avoids the problems that are the cause of these criticisms by the big-name experts.
Maryland Financial Planner Michael Kitces described our simple retirement calculator as “a fascinating retirement calculator.”
Reason #5 Why Our Simple Retirement Calculator Is Better — It Lets You Know Early On If You Are Living in a Fool’s Paradise
A common cause of retirement plan failure is for the aspiring retiree to come to believe during a wild bull market that the inflated numbers in his portfolio statement are real and likely to be long-lasting. Our simple retirement calculator teaches you the effect of valuations on long-term returns and thereby brings home the point that fantasyland gains do not long remain in place and thus cannot be treated as real for purposes of retirement planning.