Many such calculators have recently appeared as the crisis in retirement savings has received more news coverage. Fidelity, which hosts more 401(k) accounts than any other brokerage service, has recently introduced a comprehensive retirement planning suite for its clients, but according to The Institute's president
YOUR COMPASS (www.YourCompass.Compass-Institute.org) adds to the traditional array of inputs (current salary, savings balance, and investment return) a number of preferences missing from standard interview-style calculators. Specifically, it makes clear the impact of investment return on overall retirement savings. While Fidelity's interview includes a tab to estimate performance according to unspecified market conditions (e.g. "average"), the
All variables are integrated onto a single page. After answering just eight questions the user's "Retirement Outlook" is presented to them, including a projection of final salary and savings balance at their chosen retirement age, and most notably, the user's age when their retirement funds are projected to run out. Once presented with their results, users can immediately gauge the impact of changes in expected lifestyle, investment return and contributions have on the length of time their savings can last.
"Perhaps the most striking thing about this new calculator is its effectiveness in demonstrating how an increase in investment return—both before and during retirement—has an exponentially bigger impact on our chances of not outliving our money than a similar increase in contribution rate, " said Coppola. "Investors might vaguely comprehend the impact of inflation on their retirement outlook, but we want to be as accurate in our projections as possible. This tool allows them to gauge that impact both in dollars and in the number of years it may cut away from their projected retirement age."
Coppola emphasizes that the calculator is a call to action. "People may be surprised to learn that they can replicate their current quality of life in retirement, if not improve upon it, by doing just a few things differently."
A mobile application of this web-based version is in development.
Main Office: (866) 54-COMPASS
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