"If you fail to plan, you are planning to fail." ............ Ben Franklin
"If you fail to plan, you are planning to fail." ............ Ben Franklin
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Finding The Right Tool For The Job

There's an abundance of retirement planning advice available, but very few options for retirement planning tools that help you actually create a retirement plan. Just making the effort to find out how to go about this process is an important first step, but please don't then take the lazy way out and turn to the free online calculators for help. They're childish toys not worthy of your attention.

Any calculator, or "planner", that asks a handful of questions and then spits out a single number answer, or a probability of success %, is not worthy of the time it takes to use them. They're using generic assumptions, operating with insufficient information, and don't allow any flexibility for planning. Your retirement plan needs to be specific to you only. No over-arching assumptions designed for everyone else, no need for modeling thousands of scenarios (Monte Carlo simulations) that don't apply to you.

Look for a planner that's flexible, and asks for lots of personal details.

    Can you enter different retirement ages for you and your spouse?
    Can you and your spouse claim Social Security at different ages?
    Can you adjust your pre-retirement income and savings amounts - by spouse, by year.
    Are retirement savings withdrawals specified by spouse? (yes, it makes a difference)
    Can you adjust your expenses at different stages of retirement - by year.

These are just a few examples, but remember, a retirement plan needs to be fluid. You will want, and need, to be able to adjust it as life changes, or as you want to model different scenarios. A serious planning tool will allow you to easily adjust specific details of your plan, and instantly provide updated results, without having to start from the beginning each time.

In addition, retirement planning is best done using a "bottoms up" approach, rather than "tops down". In general, this means that you should start by determining the lowest level of detail - what you expect your retirement expenses to be, ideally, year by year. Then identify the income and savings that you expect to have to offset those expenses (again, year by year). Finally, add up the difference between those two totals for each year. The total amount of those differences for all years combined is what you will need to save for retirement. You're adding up the totals from the lowest level of detail, to get a grand total.

A "tops down" approach starts with a total amount (i.e. what % of your salary do you want as income in retirement?), and then it would tell you how long that amount would last. The problem is that you're guessing at that total amount from the start. Where are the details that support needing that amount in the first place? What if you guessed wrong at the % of salary needed? And what good is knowing how long it will last if it doesn't last long enough? Don't waste your time with this approach - you need to get it right the first time, and you need to see the details that support the outcome.

This is also why using the "4% rule" is faulty as a planning tool. It starts with a grand total, and tells you how much money you can withdraw from that total each year in order to not run out of money (for ~30 years, or the assumed period of retirement). That's great if you're already sure that you have more than enough money and you just want to make it last as long as possible. But what happens if those withdrawals aren't enough to cover your expenses? Making money last does no good if you can't pay your bills!

Of course, you can always choose to pay a professional adviser to handle all of this for you. If you have a spare couple of thousand dollars, or have a very complex financial situation, that may be a good option. If not, please do your due diligence to find a robust, flexible, detailed, retirement planning tool that will meet your needs. Any of the free tools online barely qualify as calculators, and in no way should they be considered as a serious retirement planning tool.  Obviously, I'm partial to the Complete Retirement Planner, but if you dig deep enough (and spend lots more) there are a couple of others that may do the job. Achieving financial security will depend on how reliable your plan is - make sure that you use the right tool for the job.

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