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I use New Retirement and one of my biggest complaints about that app is that it expects you to provide the optimistic/pessimistic rate of return for each of you
by msmith 3y ago
I use New Retirement and one of my biggest complaints about that app is that it expects you to provide the optimistic/pessimistic rate of return for each of your investment accounts. I would love to have a tool that provides some guidance on setting those numbers, based on historical returns and the asset classes in the account.
I can see value in having similar guidance for things like mortgage interest rates. Maintaining all of this educational content and keeping it up to date may be a challenge, though.
- scubakid 3y agoShowing or linking to the relevant historical data/rates next to each of those inputs sounds like a good feature idea to me.
- NoLinkToMe 3y agoYeah quite a few FIRE tools which allow you to model retirement scenarios will let you pre-fill return rates based on historic returns. This one is pretty nice to mimic. You have to Ctrl+F for 'projection method' and then switch it to Historic Cycles, or Monte Carlo Simulation: https://engaging-data.com/fire-calculator/ https://engaging-data.com/fire-calculator/ Then you'll see basically a distribution appear on the graph with the median (50%), but also the 25% & 75%, and the 10% & 90% likely return scenarios. Quite useful to see what a bottom 10% ('worst-case') scenario would look like, and how it would affect your finances and your timelines.