Don't Bet Your Retirement on Monte Carlo Models

They measure market risk but don’t eliminate it, and they don't consider all the twists and turns life can take. Instead, build a plan to create a stable income throughout your retirement, no matter what.

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When you sit down with a traditional financial adviser to plan your retirement you will provide her with the spending budget you have in mind. The adviser will adjust that amount for inflation and after running the numbers through a “black box” model, will predict how many years your retirement savings — typically made up of cash, stocks and bonds — will last.

The model to make this prediction is called “stochastic” — a fancy way to describe what is a typical Monte Carlo simulation model.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Jerry Golden, Investment Adviser Representative
President, Golden Retirement Advisors Inc.

Jerry Golden is the founder and CEO of Golden Retirement Advisors Inc. He specializes in helping consumers create retirement plans that provide income that cannot be outlived. Find out more at Go2income.com, where consumers can explore all types of income annuity options, anonymously and at no cost.