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Kotlikoff..."No one can safely use Fidelity's "Planning Tool" to plan their finances

Kotlikoff make some interesting comments...curious...for those retired and non-retired, and if you are comfortable answering...how do you plan your finances...self planning, advisor, software tool, "I have a bullet proof govt pension so not too concerned", kind of rough frame work and wing it as man plans and God laughs....??

https://larrykotlikoff.substack.com/p/fidelitys-retirement-planner-versus

Comments

  • I couldn't open the link but googled Kotlikoff and found it on his substack page.

    You get what you pay for. Fido is free. MAxFi (Kotlikoff) costs $89 a year, but you only need to run it once and then maybe a few years latter. They will save your data as best I can tell

    I have been pretty impressed by MaxiFi, and consider it money well spent, although it is best for people who are making decisions prior to retirement like "can I afford to retire now" or when to take Social Security

    I suspect most people would come at spending decisions on irregular basis ie "Can I afford that trip this year"

    MAxifi tells you what the max is you can spend every year. A little strange, as I assume most people worried about retirement are having trouble saving enough, not overspending in retirement
  • image
    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
  • edited September 1
    Sorry @Baseball_Fan Can’t pull up the linked source.

    I do not use any particular planning tools. I invest primarily in a wide variety of actively managed moderate risk funds. All (except PRPFX) allow the manager a lot of discretion in what to own. Wouldn’t own these funds if didn’t trust the managers to make good decisions. When I do make a change in the stack of funds (as I did Friday) I follow up by using Fidelity’s analytics tool for some sort of corroboration as to how much market risk I have and how it is dispersed among asset types. Usually those results and my rough guess align pretty closely. I prefer a scotch / water ratio of about 50/50. In terms of fixed income vs. riskier assets, the desired proportion is pretty similar.

    Subscribe to James Stack’s informative InvesTech newsletter, surveying his recommended portfolio - but taking little in specific action from it. Subscribe to Bill Fleckenstein’s daily commentaries - his obsession over gold and his foreboding about equity valuations in general (“passive inflows” particularly). Subscribe to Barron’s, the WSJ and Bloomberg. Currently listening nightly to a long stack of podcasts by Meb Faber (Cambrea Funds) whose interviews with various money managers are both entertaining and insightful. I subscribe to Morningstar mainly for running fund comparisons. Sometimes their fund analysis points out how one manager’s approach varies from others in the same camp.
  • I couldn't open the link but I found this article. I hope they are mostly similar.

    Fidelity's Retirement Planner Versus MaxiFi Planner
  • Thanks @Mark. Your link provide content may be useful for investors. I look at MaxiFi several years ago and decided it was not for us. We have relatives who work in wealth management business. From what I see over the years, their returns are really pedestrian in light of high fees they charge.
  • @mark. Thanks for sharing that link. Mr .Kotlikoff convinced me his product is not for me. Having been retired for almost six years I have figured out that the finances of retirement are an always moving target that will defy precision modeling ,,, even from a Harvard economist who has published 3.64 million articles.
  • AND MaxFi and an everything you'd ever want to know LINK. Well, perhaps; but there's even a link to the Bogelheads and a discussion there. And don't miss the videos, too. SCROLL down the multi link page.
    All I want is a real portfolio returns list that can be verified from prior years. If one finds that list, please link here. Thank you.
  • @Mark, thanks for linking the article I was referring to...apologies that my link didnt work.

    BF
  • @catch22, thank you for the link above. The one link to Bogleheads is most relevant for my planning. I worked briefly with Vanguard Selected Advisory Service and they ran their Monte Carlo simulation with several scenarios with expected return, inflation and withdrawal rate. We did fine even in the worst scenario without having to reduce the withdrawal %. Our situation may be different from many retirees since we have few debts, short and long term. The wild card is our health.

    Like you I like to see “real date” from MaxiFi planning software in order to gain more confidence of its utility.
  • edited September 2
    BF,

    No pension or any other safety net here.

    As to planning tools, the only one I use is the M* portfolio which I started using about 7 years ago when I realized that I had way more cash than I thought I had which meant I was unrealistically risk shy.

    I have only spent on what I needed and had worked when work was available. All the good things that happened to me are not because I planned any of them. My success rate of my long term planning is near zero if not zero. I do not plan for financial outcomes, and hence, I do not need to use any tools. May be I fall under your category of "wing it as man plans and God laughs."
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