Most financial Web sites include a retirement calculator. You can plug in your age, how much you have in your portfolio now, how much you plan to save until retirement, and you'll get one nice and smooth portfolio projection. This is the straight-line model. You can also use a Monte Carlo simulation and get two nice and smooth portfolio projections.
But do they work? Is there anything better? My research, as outlined in the May, June, and July issues of Financial Planning, showed that there is. Here's how to make it clear to your clients that what they thought they knew was wrong.
written by Lee Ruth
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