Manuel Mogollon
Manuel Mogollon

The Retirement Tool



In his paper, “It’s Time to Retire Ruin (Probabilities),” Financial Analysts Journal 72 (2): 8–12, 2016, Milevsky, Moshe A, wrote: “Here is the main problem. How do we explain to people that they (1) are spending too much, (2) are retiring too early, or (3) have not saved enough? More importantly, how do we get them to act on this knowledge?” 


In my opinion, if people could have access to an easy, accessibly, simple retirement tool, they will, most probably, be more interested in saving for their retirement.


That is the reason why I developed an online retirement tool, with non-profit intention, in which there are only 9 Steps for entering basic information about retirement; the results are then presented on several charts and tables. No registration or personal data about the user is required to use the tool, and the tool doesn’t keep any of the user’s information, everything is erased after the website is closed. Also, there is no commercial advertising and no donations are asked. It is just a public service.


The tool also has a feature, “When to Start Social Security?” that answer the following question:  Would the year-end balance of my portfolio at 85 years of age go up or down if I start Social Security at 70 instead of 65? The user runs the simulation “When to Start Social Security?” and is able to see if it is better to start Social Security at 65 or at 70. 


After entering all required information in Steps 1 – 9, users can print a report of their portfolio analysis including graphs, tables, snapshots, and some retirement and financial information by selecting “Report” in the navigation bar and clicking on “Print” at the end of the page.


If you are planning your retirement and you want a simple tool to make some basic calculations, this is your instrument. You don’t need to register or provide personal information. Just use the tool and, then, if you think that you would benefit from professional services, go ahead and hire a professional to help you with planning your retirement, which is not the same as getting help with your investments (financial advisor), or with your taxes (tax advisor or tax consultant).


When planning for retirement, people are concerned about saving enough money so that when they retire, they will be able to sustain the same standard of living that they currently have. There are several questions that they should ask, such as the following:

  1. Am I saving enough so that my savings will last for a specific number of years; also, how much money will I have at a specific time in my retirement?
  2. What are the statistics regarding my lifetime expectancy?
  3. Based on the probability of survival, the type of investments that I make, and my savings consumption during retirement, what are the probabilities of a secure retirement, i.e., will my savings last?

The factors that control your wealth after retirement include the following:

  1. How much money do you have in savings when you retire?
  2. How do you invest your savings, which really means is at what interest rate do you forecast that your savings will grow?
  3. How much money do you withdraw from your portfolio?
  4. Age and mortality

Money Required to retire – If you do some research you will find that, according to 101 Ways to Build Wealth, Money Magazine, May 2014, you will need  

  • 7.3 x    your salary by 55 to retire at 65 and replace 70% of your income.                          
  • 7.7 X    your salary by 55 to retire at 68 and replace 80% of your income.                          
  • 6.4 x    your salary by 55 to retire at 68 and replace 70% of your income.

Or, according to Fidelity, you will need the following level of savings, so you won't outlive your savings during 25 years of retirement.

By Age             You Should Have This Much of Your Salary Saved...

30                            1X

35                            2X

40                            3X

45                            4X

50                            6X

55                            7X

60                            8X

67                          10X


How to invest your savings at retirement time – Most people don’t need professional planners, what they need is for someone to invest their money in a simple, well diversified portfolio, with a low-cost, no-load index, that does not require market timing. Those types of investments are called “Lazy Portfolio.”  If you want to do it yourself go to Portfolio Visualizer Portfolio Visualizer, pick one of the lazy portfolios, and it will give you the ticker name, percentage allocation, as well as its performance over a certain period of time.

Portfolio Withdrawal – There are many portfolio withdrawal strategies and many papers have been written about them. Some of these are included in this tool.

At the end, the portfolio is calculated for every year as follows:

Balance at the End of the Year = Balance at the Beginning of the Year + Interest - Withdrawals

Age and Mortality – What is your remaining lifetime? If you know that you will die before 75, then you will spend more of your retirement, but what about if live to 95? Maybe be you need to spend less.

That is all that counts!


You may ask, what about the income that I have after retirement, such as Social Security, pensions, annuities; also, what about my expenses during retirement, don’t they count? Well, one of the withdrawal strategies, Pre-retirement spending, takes into account these factors by calculating the following:

Portfolio Withdrawals = Expenses – Social Security – Pensions - Annuities


You withdraw money from your portfolio as you need to complement your retirement income to be able to sustain the standard of living that you want.




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I am updating the Retirement Tool to include the Probability of Secure Retirement..


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