Changes to VG's Financial Engines product...

[rescueme]

Just an FYI. Changes were made to FE this weekend that will result in possible forecast changes due to FE now not assuming that a retiree would fund their retirement expenses with only an annuity.

Message from VG/FE:

"Since you have last used our service, we have made some changes to the assumptions we use when we convert projected portfolio balances into projected income in retirement. These changes better reflect most people's preferences to maintain liquidity in retirement or provide for death benefits, rather than annuitize all of their wealth in a simple life annuity. As a result, your forecast may have gone down.

If you would like to learn more about how we generate your income forecast give us a call at (800) 523-1188."

[Nords]

Quote:

Originally Posted by rescueme Just an FYI. Changes were made to FE this weekend that will result in possible forecast changes due to FE now not assuming that a retiree would fund their retirement expenses with only an annuity. Message from VG/FE: "Since you have last used our service, we have made some changes to the assumptions we use when we convert projected portfolio balances into projected income in retirement. These changes better reflect most people's preferences to maintain liquidity in retirement or provide for death benefits, rather than annuitize all of their wealth in a simple life annuity. As a result, your forecast may have gone down. If you would like to learn more about how we generate your income forecast give us a call at (800) 523-1188."

Wow-- FE has stuck to their guns on the annuity approach of their analysis for over a decade. They must not be making much money these days!

[samclem]

You have to call them to find out how they now calculate the amount needed? Seems like something they'd make readily available online, at least in outline form.
Maybe they could let users choose broad asset classes, and perhaps they could use historic return series for these assets iteratively in the sequence in which they actually occurred. If only we had such a tool. Oh, wait . . .