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Monday, November 23, 2009

  • Are online retirement calculators misleading?

    Katie McCaskey’s Avatar

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    By Katie McCaskey, on Mon Mar 30, 2009 8:46am PDT

    View of Monte Carlo

    View of Monte Carlo

    Image via Wikipedia

    By Katie McCaskey, Geezeo.com
    Ah, the idea of retirement in sunny Monte Carlo…. It appeals to many people. It almost doesn’t matter if you’re referring to the place on the French Riviera or the version in Las Vegas.

    Isn’t that interesting, considering the vast differences between life on the Mediterraean Sea or The Strip?


    So it comes as some delicious irony that the calculation used in many retirement calculators is an algorithm developed in the 1960s and called “Monte Carlo”. Monte Carlo is responsible for creating the data you get when you enter your age, expected retirement date, and current accumulated assets in any number of online calculators.


    So what’s wrong with that? Well, potentially it means you could end up at what you consider the “wrong” Monte Carlo in retirement.

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    Related: taxes, retirement planning, monte carlo, investments, income, expenses, algorithm

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