• After all the additional income and expense options are netted out, the PersonalCapital retirement calculator offers an opinion on the chances of your portfolio providing the balance needed each year
  • The only risk this kind of calculator addresses is sequence of returns risk – the risk that early poor returns will deplete your portfolio so much that you run out of money
  • It’s not enough to only address sequence of returns risk – for many, sequence is neither the most likely nor the most calamitous risk that they face in the years ahead

 

Robo-advisers are websites that provide automated low-cost investment in balanced portfolios. Typically, the portfolio balance is based on risk tolerance quizzes and/or client-supplied time horizons, two common but limited methods for establishing how much market risk to allocate to the portfolio. As we discussed previously, simple quizzes and assumptions about time in the market may not be a sufficient basis for a recommendation that meets the new DOL ERISA fiduciary rules that go into effect next year for retirement money. (Continue reading….)