Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
From the article: "As a starting point is the quote I believe comes from Woody Allen that “there is no situation where having more money made it worse.” "
The two referenced articles that claim retirement planning tools are useless are themselves useless.
It is hard to find more than one or two insights provided by these foolish, uneven articles. One is that any retirement projection that is precise to the penny, like “the exact retirement number is $2,844,957.” that is cited in the article is foolish. Of course it is. But the end product of any calculation will be a precise number value. That is the character of any calculation. It is the simple task of the user to understand the approximate nature of the total guesstimate, and to round off accordingly.
Secondly, the articles emphasize that one-size-doesn’t-fit-all, and that if deviations or contingencies disrupt a plan, it will fail. Of course it will. Any plan will need revision and update. This too is not an especially new ringing clarion bell. As John Maynard Keynes said many years ago: “When the Facts Change, I Change My Mind. What Do You Do, Sir?” Some researchers credit this saying to other folks.
Certainly, just like there are bad mutual funds, there are many bad and/or deficient retirement planning tools offered. Bad apples are bad apples. A potential user must discriminate. Flexibility and completeness in input parameters for the special circumstances of the particular user are several such discriminating factors.
Retirement planning programs are only tools. They are only useful if properly used. The computer acronym GIGO (Garbage In, Garbage Out) is appropriate here. The referenced articles simply ignore this paramount and decisive consideration. The referenced articles also disappoint by not identifying some readily accessible superior retirement planning tool options.
I will not disappoint in that regard. I have posted this address on earlier MFO discussions. If you are motivated, please try the Flexible Retirement Planner at:
It is not perfect, and will not service everyone equally well, but it’s a terrific resource with many user options. Give it a test run. There are also many other superior planning tools available on the Internet. But it does take a little research effort to find them.
It’s always good to end on a positive note. These planning tools can’t take the uncertainty out of the future, but they can provide some realistic boundaries. They beat punting.
"Retirement planning programs are only tools. They are only useful if properly used. The computer acronym GIGO (Garbage In, Garbage Out) is appropriate here. The referenced articles simply ignore this paramount and decisive consideration."
I respectfully disagree. Your writing above this (with which I agree) discusses the poor engineering of (some) retirement programs - their claim that they can generate greater accuracy than provided in their inputs, that they are well suited to all people.
These are faults in the design of the tools, and not in the user input. GIGO is a term that says a well designed tool will produce garbage if it is fed garbage. In contrast, these simplistic tools are not well designed, so they often produce garbage even given high quality data. Not GIGO.
My GIGO comment was specifically directed at some sloppy inputs that users sometime make. Both bad program design and bad user input contribute to erroneous planning.
The article's author recognized this execution failure when he reported that users sometimes don't consider social security benefits or other income sources when making their analysis.
GIGO is also applicable if users input unrealizable investment return estimates. In many instances, the end user is the guilty participant in his dream world, not the tool. Using the claw end of a hammer to insert a nail is not a good utilization of the tool.
Comments
The two referenced articles that claim retirement planning tools are useless are themselves useless.
It is hard to find more than one or two insights provided by these foolish, uneven articles. One is that any retirement projection that is precise to the penny, like “the exact retirement number is $2,844,957.” that is cited in the article is foolish. Of course it is. But the end product of any calculation will be a precise number value. That is the character of any calculation. It is the simple task of the user to understand the approximate nature of the total guesstimate, and to round off accordingly.
Secondly, the articles emphasize that one-size-doesn’t-fit-all, and that if deviations or contingencies disrupt a plan, it will fail. Of course it will. Any plan will need revision and update. This too is not an especially new ringing clarion bell. As John Maynard Keynes said many years ago: “When the Facts Change, I Change My Mind. What Do You Do, Sir?” Some researchers credit this saying to other folks.
Certainly, just like there are bad mutual funds, there are many bad and/or deficient retirement planning tools offered. Bad apples are bad apples. A potential user must discriminate. Flexibility and completeness in input parameters for the special circumstances of the particular user are several such discriminating factors.
Retirement planning programs are only tools. They are only useful if properly used. The computer acronym GIGO (Garbage In, Garbage Out) is appropriate here. The referenced articles simply ignore this paramount and decisive consideration. The referenced articles also disappoint by not identifying some readily accessible superior retirement planning tool options.
I will not disappoint in that regard. I have posted this address on earlier MFO discussions. If you are motivated, please try the Flexible Retirement Planner at:
http://www.flexibleretirementplanner.com/wp/
It is not perfect, and will not service everyone equally well, but it’s a terrific resource with many user options. Give it a test run. There are also many other superior planning tools available on the Internet. But it does take a little research effort to find them.
It’s always good to end on a positive note. These planning tools can’t take the uncertainty out of the future, but they can provide some realistic boundaries. They beat punting.
Best Wishes.
I respectfully disagree. Your writing above this (with which I agree) discusses the poor engineering of (some) retirement programs - their claim that they can generate greater accuracy than provided in their inputs, that they are well suited to all people.
These are faults in the design of the tools, and not in the user input. GIGO is a term that says a well designed tool will produce garbage if it is fed garbage. In contrast, these simplistic tools are not well designed, so they often produce garbage even given high quality data. Not GIGO.
http://www.thefreedictionary.com/GIGO
Thank you for your reply.
My GIGO comment was specifically directed at some sloppy inputs that users sometime make. Both bad program design and bad user input contribute to erroneous planning.
The article's author recognized this execution failure when he reported that users sometimes don't consider social security benefits or other income sources when making their analysis.
GIGO is also applicable if users input unrealizable investment return estimates. In many instances, the end user is the guilty participant in his dream world, not the tool. Using the claw end of a hammer to insert a nail is not a good utilization of the tool.
Thanks again.
Best Wishes.