For all the saving and planning you do to prepare for retirement, there remain two questions that are impossible to answer about the strength of your plan:
- What will the stock market do during my retirement?
- Will I outlive my savings?
A lot of planning expresses those risks like this: “Under our Monte Carlo analysis, you have a 90% chance that your money will last until age 90.” Or if you’re more sophisticated, they’ll give you a plot point like the following and then ask you to select the best set of outcomes.
There are two problems with these approaches:More