Other retirement planners

[Jim]

I like the tool it is great. I have a question when it comes to the percentage of the plan succeeding. Why does this differ so much from other planners. I put my plan in this planner it shows 98% success. I put it in another planner the same values and time line and it shows 69% success. How can this be so different.

Jim

[jimr]

Here are some possible reasons for different results compared to other planners:

1) Flexible Spending Policy - The default settings for the planner assumes that you're likely to adjust your retirement spending based on how your portfolio does. To turn this feature off, set the Spending Policy to "Stable". With the spending policy set to stable, the simulator will behave more like other planners.

2) Rate of Return and Standard Deviation - To compare results with another planner, you should set the "Return - Avg" and "Return - Std Dev" to the same value as the other planner. First set the investing style to "custom" then you can directly enter values for return and std dev. If the other planner you're comparing to doesn't have a setting for standard deviation, set it to 0.

3) Inflation - Small changes in this setting can make a big difference, so make sure you set the inflation rate to the same setting as the planner you're comparing to.

4) Taxes - Some planners ignore taxes and any other planner is likely to handle taxes differently than FRP. Set the tax settings as close to the other planner as possible. If the planner you're comparing with doesn't handle taxes, set the tax rates to zero for comparison.

5) Life Expectancy - Make sure both planners use similar assumptions about how long the plan will run.

Hope that helps...

Jim