When Vanguard's Retirement Income Calculator Stopped Making Sense"
Try Harder!The president of the American Finance Association, Dr. David Hirshleifer, noticed something peculiar about Vanguard's Retirement Income Calculator. By its reckoning, a hypothetical 55-year-old investor who saved at the tool's highest possible rate, earning the highest possible return, holding the highest possible current retirement assets, and willing to settle for the lowest possible income-replacement rate … would fail. Her projected monthly income would fall short of the projected goal."
Click here for more
Comments
https://mutualfundobserver.com/discuss/discussion/51886/m-when-vanguard-s-retirement-income-calculator-stopped-making-sense
Regards,
Ted
Maybe it's just me, but I've always been one to check my assumptions when someone's version of reality doesn't jive with mine. WRT VG's calculator, what I would have done (even before consulting the calculator) was laid out an expected set of annual expenditures- a tentative spending plan of sorts. It doesn't become my 'budget' until I decide to adopt it and control my spending to conform to it. If my spending plan says that I need $190K/yr despite some automated thing telling me that I need $225K/yr, I say WTF? One of us clearly doesn't understand the problem. If I decide to go ahead with an annuity, and there is going to be a shortfall of $TBD, it's incumbent on me to revisit my spending plan and make adjustments. You know, cash-flow management.
https://www.fidelity.com/viewpoints/retirement/how-long-will-savings-last