In retirement planning, the simplest questions to ask are oftentimes the most difficult to answer. JourneyGuide is a new retirement planning software designed to quickly provide those answers in an interactive application. We begin our five-part series on JourneyGuide by first looking at the most pressing question, “How much can I spend in retirement?”
Traditionally, the focus of retirement planning has been on accumulating to a target account value. Clients are repeatedly told “you need to have X dollars before you can safely retire.” The emphasis has been unduly placed on an intangible figure that can have a negative impact on the advisor-client relationship. If the target account value appears too lofty, the client may react with an attitude of helplessness and have a very negative outlook towards retirement. Another outcome of focusing solely on the retirement account value is the abstract concept of translating an account value to something the client can better relate to; namely, a discussion about lifestyle and how much the client can spend in retirement.
JourneyGuide’s innovative, patent-pending algorithms allow clients to see in real-time what is most meaningful to them, i.e. their retirement spending number. Instead of using an antiquated rule such as a static 4% withdrawal rate or an ambiguous dynamic withdrawal strategy, JourneyGuide determines the appropriate spending amount based on actual spending patterns and modeling thousands of possible investment outcomes. JourneyGuide has partnered with several of the country’s top graduate programs in actual science, financial engineering, and behavioral finance to conduct research on how people spend in retirement and what moves them to action.
Don’t be fooled by the application’s speed and intuitive output. JourneyGuide addresses sequence of return risk with calculations using 5000 market simulations, five times more than competitors with Monte Carlo analytics! This additional computational power translates into dramatically improved accuracy of advice. In fact, many tools on the market are overly simplistic and assume only a constant rate of growth for investments or even worse, consider income merely on a pre-tax basis.
Now with JourneyGuide there’s a better way to approach retirement planning and answer your client’s most pressing question, “How much can I spend when I retire?” Visit www.journeyguideplanning.com to request a demo or start your free trial today.
Michael L. Smith is a co–contributor to this press release.