Type “Retirement Calculator” into Google and look at the top 5 results – you’ll see tools from:
- CNN Money
- Charles Schwab
- Bloomberg Business
They all look something like this:
And here’s what they all have in common:
- You must forecast saving the exact same every year until you retire.
Can you factor in a few lean years – like when the kids are off at college?Or can you just plan on taking a big vacation one year? Absolutely not.
- You have to spend the exact same amount each year after you retire.
Can you factor in things like paying off your mortgage or planning for a Wedding? Nope, forget it.
- All savings/investments earn the same growth.
But we all have multiple accounts, right? Can we at least split out tax-deferred from taxable investments? Not with these tools.
- What if we want to “partially” retire during our early 50s and then fully retire a bit later on?
Can we see the effects on my overall financial plan? No way.
- How about saving your data?
Can you save the current situation and come back later to see how your’re doing against your assumptions? Nope, not even close.
So what are these tools good for? We would argue, nothing – and they might even be worse than nothing in the sense they tease you with the promise of knowledge, but end up making you feeling nervous and vulnerable.
Which brings me to one more feature they nearly all have in common – they exist to be funnels for connecting you to money professionals or brokerage accounts.
Therefore, the feeling of vulnerability is no accident. These are not tools to answer your questions, but rather to spur you into action – and we find it somewhat defeating that these are the top search results.
Of course, there are other, far better tools for planning your financial future. We think OnTrajectory is the best of them, of course – and we hope you’ll find our combination of ease-of-use and power to be just the right mix to get to usable answers regarding your path to a financially secure future.