Announcing The Launch of Personal Capital’s Retirement Planner

in Personal Capital News by

If you could go back in time and give a younger you advice about money management, what would you say? Not Biff from ‘Back To The Future’ advice, on who wins the world series, or a horse race, but advice on real tools and techniques you could use to live better, financially speaking.

Unfortunately we can’t go back in time, and we can’t fix the past. In the here and now, we are the sum total of both our good and bad financial decisions. At Personal Capital, we’re turning our attention away from time travel into the past and instead focusing on predicting the future – your financial future.

Today, we’re announcing the launch of our new Retirement Planner – designed to help you forecast your retirement readiness by assessing your current financial situation, portfolio, spending, savings and retirement goals.

With our tool, you can:

● Set your retirement goals and track your progress over time.
● Enjoy a free, easy-to-use tool that automatically pulls financial data from your Personal Capital dashboard.
● Scenario plan – Planning for college? Saving for a new home? Use Retirement Planner to map out how much money you’ll need to meet your goals.
● Adjust your retirement plan for life milestones and financial events (inheritance, a wedding, rental income, vacations, and more).
● Evaluate how your saving, investing, and spending habits today affect your retirement, seeing the impact of everything from a home remodel to a new car purchase.
● Calculate the monthly spending you can afford in retirement.
● Take advantage of a data-driven retirement plan built on Monte Carlo analysis and robust modeling tools to see the most and least likely financial outcomes.
● Speak with an advisor to learn how Personal Capital’s Advisory Services can help you prepare for retirement.
● Check out the Recommendations page, which will help you get back on track to reaching your retirement goals.

How It Works

To give you an up-to-date forecast of the likelihood of reaching your retirement goals, the Retirement Planner will draw savings, spending, and portfolio account data from your Personal Capital dashboard. If you choose, you can also override with your own numbers. The Retirement Planner then walks you through questions about children, plans for supporting their education, and your social security expectations, to create a holistic forecast.

The Retirement Planner is a retirement calculator like no other, tailored to you and your goals. It works by running 5,000 Monte Carlo simulations, showing you the median and 10% worst outcomes of your retirement planning. Having 1, 2, or 3 million dollars at retirement might seem like a lot now, but as we live longer we need to ensure that our savings last longer too. The Retirement Planner will show you how much monthly spending your portfolio would allow you throughout retirement.

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Our tool is a dynamic plan that responds to how you live financially. Within the Retirement Planner, you can edit figures such as retirement age, spending and savings. You’ll also have the option to add additional income goals, such as downsizing your home in retirement or adding pension income.

Once you have entered your additional income events and expense goals, you can see how they impact your retirement plans. The more time you have to plan ahead, the better off you’ll be in achieving the retirement of your dreams. If we think we can help, you might see a ‘How Can I Improve This’ link in your Retirement Planner, which will make suggestions like changing your asset allocation, investing available cash, reducing mutual fund fees, or being more tax efficient.

If you need more advice, you can speak with an Advisor to help you evaluate how much you might spend on your children’s education, or plan for buying a home or a car.

Get Started

The Retirement Planner is the latest tool we offer to help you live a better financial life. It’s not just a useful, living plan – it’s a central part of how we want to enable you to reach your goals. As always, we’d love to hear your feedback on how it could be even better in the months to come. Check out the tool here now.

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Jim Del Favero
Head of product for Personal Capital. I spent 17 years at Intuit working on Quicken, Quicken.com, Quicken Online and other direct to consumer financial offerings.
Jim Del Favero

Latest posts by Jim Del Favero (see all)


20 comments

  1. Ivan

    Neat tool, couple of questions about it are below.

    1. Does your tool incorporate the fees that you identify in your “Retirement Fee Calculator” in your expected annual return based on current portfolio? It doesn’t appear like it does. This would obviously lower expected return.

    2. I didn’t see an option to adjust out year risk levels, am I missing it? Most people will probably take significantly less risk near and during retirement then they will in accumulation phase. Without having the ability to model a decreasing risk tolerance, or a full/partial conversion to a SPIA, it looks like most people will have unrealistically optimistic results.

    3. Does your simulations include the possibility of inflation being different then the target number, or is it strictly simulation the different potential changes in equity?

    Reply
    • Jacqueline Quasney

      Jacqueline Quasney

      Thanks Ivan, here’s some answers to your questions below:

      1. No – the current tool doesn’t incorporate fees, but that’s a great idea and we are happy to look into adding those.
      2. We use the actual current portfolio expected return, but we can look at adding the ability to change the return at retirement.
      3. Under assumptions you can adjust the inflation rate, default is 4% the historical average for the past 60 years.

      Reply
  2. Denis

    It would also be great to have a “retire now” button. That way you could see how much you can spend right now if you decide to retire, including all the future assumptions (kid’s college, etc.) that you have included. Or it could be a “when can I retire and get the desired monthly spend” button that shows at what age you can retire at the desired monthly spend, again assuming all the future assumptions such as kid’s college.

    Reply
    • Jacqueline Quasney

      Jacqueline Quasney

      Good suggestions Denis! We are going to keep improving the tool so we’ll definitely take your ideas into consideration for the next release.

      Reply
  3. Fred

    You also don’t appear to be applying inflation rates to future expenses. This would be a helpful option to select when inputing a future expense. Such as the ability to have an expense in today’s rates take place in the future at an inflated rate.

    Reply
  4. George

    Great tool. One thing that crossed my mind was to include some sort of investment income (such as dividends, interest etc) along with an expected annual rate of growth, Investment income is a category within the “cashflow/income” section so it makes sense to have that option IMHO.

    Reply
  5. Ed

    I can’t seem to find Retirement Planner. Is it part of Personal Capitol or a separate app?

    Reply
    • Jacqueline Quasney

      Jacqueline Quasney

      Yes Ed, it’s now fully integrated in the Personal Capital app – but only for desktop at the moment (not mobile and tablets just yet). You can access the tool by selecting on “Investing” tab and then select “Retirement Planner” from the drop-down.

      Reply
  6. Mike

    I don’t really understand how to launch the planner. I have an account with Personal Capital but when I click on the link it just takes me to my mobile App on my IPad but I don’t see how to launch it from there?

    Reply
    • Jacqueline Quasney

      Jacqueline Quasney

      Hi Mike,

      The Retirement Planner tool is currently only available on desktop – so if you are accessing by iPad or Mobile you won’t see it. We’re working on those versions for the next release. Thanks!

      Reply
  7. Lawrence

    Clarification question: It seems your making a distinction between spending and income. Is that correct? So If I enter $100,000 for my desired spending ability, that’s what I want to have available to spend AFTER taxes. Thanks

    Reply
    • Ken

      Good question. I had the same one. I worked with a CF advisor from Vanguard who provided spending values for three retirement ages. The Vanguard advisor told me specifically he was giving me post-tax spending values. His spending values (which he said were 85% probability values) correlated well with the personal capital “spending” values, also at around 85%. I’m inclined to agree that personal capital “spending” truly means spending (after tax), not pre-tax income necessary for that spending. However, I would prefer to hear it from the horse’s mouth. 🙂

      Reply
  8. Anthony

    Nice tool. However, can I rely on this tool if it only uses investments to model a retirement plan. Research by one of the leading authorities on retirement planning says an optimal retirement plan is not a simplistic as Personal Capital’s tool leads us to believe (see link below on the white paper written by Wade Pfau, Ph.D., CFA). Most people wouldn’t sit a chair with only one leg and the same should apply to our retirements. Does Personal Capital plan to integrate other products into the “Retirement Planner Tool” (More and than just EFT, MF, Stock, Bonds, Money Market). https://www.oneamerica.com/wps/wcm/connect/23b21fa6-8e9c-49c9-a49e-1a0b0ef95d91/OA_WP_Opt-Ret_Inc_05-15_web.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=23b21fa6-8e9c-49c9-a49e-1a0b0ef95d91

    Reply
  9. Jim Baumstark

    Question:

    The planner looks like it does everything in “today’s” dollars – cash flows are not adjusted for inflation and portfolio returns are real returns. This generally seems fundamentally sound, but I think for certain “income events” it is not realistic.

    For example, if one expects to receives $50,000 per year pension at age 65 (in nominal dollars, not adjusted with any cost of living adjustments – most pensions aren’t), I think the calculator should reduce those payments by cumulative inflation to turn them into “today’s dollars” – as it works now, I think it overstates the value of a pension or any income event that is entered in nominal dollars.

    Am I correct in how this works?

    Reply
  10. js

    Hi – I made some incorrect assumptions in my initial projections of what I will be contibuting to my primary 401K on an annual basis. I don’t see any way to adjust that number, nor do I see any way to erase my projections and start over.

    Also, it would be wonderful to have a way to enter information for accounts (like a cash balance account) where an approximate amount is contributed annually while working, with an interest rate of return the user enters, that stops on the day of retirement.
    Thank-you.

    Reply
  11. pranay

    Could you please share list of assumptions behind this tool?

    Reply
  12. Tom Becker

    Still curious if future spending should be listed in today’s dollars (therefore automatically adjusted for inflation by the tool) or input at the future expected cost. For example, I might believe that college costs $25k/year today, but my kids don’t start college for 10 years. Should I list at $25k or at my expected future cost?

    Reply
  13. Jen

    Can Personal Capital track my 403b and fees associated with that as well as my rollover IRA and Roth IRA?

    Reply
  14. Mark Warner

    I can’t seem to find a way to change the rate of return. 8.9% annual rate of return is far too optimistic for this current environment and would rather have the choice to chose other values. Without this feature, this tool is just not that helpful.

    Reply
  15. Steve Hunter

    How do I factor in my 529 accounts as it relates to paying for college in the planner? Should I only put in what I think I will spend above the 529 balances in the CF planner?

    Reply

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