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August 23, 2007


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I like this. Even though they state that I'm only just on course to make my retirement figures if the market does well. Much as it pains me, they're probably right.

The key to whether these calculations are actually effective is all in the assumptions and methodology they use. Here's my analysis, based on feedback from leading Certified Financial Planners who did competitive research for our startup:

Choose to Save is pretty much worthless, since they don't even calculate based on how much you're saving and how that adjusts over time. Way to many key assumptions hardwired into the calculator.

Nationwide is OK, but it's pretty much a marketing tool.

Fidelity- here's a post that deals with the issues inherent in this tool:

You might want to evaluate Financial Engines as well.

The issue with all of these tools is that they don't offer a clear process to get on track for retirement. They tell you how much you need and then you're on your own. Planning for retirement is much more involved, since as your life situation changes and market conditions change, you need to make course corrections. A process based tool would be much more helpful.

For those willing to spend some money (~150) for a more robust, unbiased planning tool, ESPlanner is one of the best I've found. The technology is a bit dated, but the features and logic are excellent. I'm not affiliated with the company.

From reading elsewhere I think the fact that you have actually spent time calculating what you will need in retirement puts you ahead of probably 99% of people in the US. You seem to be very conservative about what funds you might need as you haven't reduced any potential needs as you grow older (although my limited knowledge of Medicare in the US probably means that's a good thing).
Are you targetting yearly amounts that go towards your fund or doing this over a different timescale?

Yes, I set aside yearly savings and then review my status at the end of each year.

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