Would you trust the diagnosis of a doctor who only asked you three or five questions? Well, the TIAA-Creff website calculator determines how much life insurance you need based on only three questions; Fidelity’s myPlan website calculator determines your retirement savings needs after only five questions.

This is so inadequate as to be considered ‘financial malpractice’, a term coined by Boston University economist Laurence J. Kotlikoff, developer of the software used by Bay Area Planners.

Says Kotlikoff, “The Financial Industry is making incredibly crude and dangerous saving and insurance recommendations. Investment and insurance companies are recommending four to five times too much saving and Insurance for many, if not most middle class households. To “help” workers meet astronomical retirement spending goals, investment companies recommend high yield, but also high risk (and high fee) investments.”

Satisfying your retirement spending needs has a price—namely not satisfying your pre-retirement spending needs. Traditional planning, in using an arbitrary replacement rate to set your post-retirement spending, seems to care little about the impact of that target on your pre-retirement spending.

Calculators that utilize replacement  rates or ‘Rules of Thumb’ aren’t really interested in giving you good advice. They are interested in giving you quick advice—advice that will speed you along to buy their mutual funds or insurance policies.

Any one of these ‘Rules of Dumb’ should cause you to RUN, not walk, from the source of that advice:

• You will need 75% of your working income in retirement
  
• Life insurance should be 7 times your income
  
• A ‘Safe Withdrawal Rate’ is 4%
  
• Invest your age in bonds

Whether your nest egg is $500,000 or $5 Million, we start with a correct understanding of your situation. Just like a doctor asks a patient questions in order to formulate a diagnosis, we ask appropriate questions on retirement. Using a sophisticated software package, the information gathered will help us formulate strategies that will work in your situation. The resulting action plan will be discussed with you in a face to face meeting. Once the plan is agreed, we help you implement your personalized strategies so you are set to enjoy your Golden Years.

The links to the left will lead you to to further details.