Broker Check

Retirement Planning Tools

April 30, 2019

Here’s an interesting tidbit from the investment industry: In 2014, Merrill Lynch hired a gerontologist on staff – the first financial gerontologist of all time.1 Why? Because their financial advisors needed to learn how to plan for older people who are living longer than ever. The problems associated with this new era of longevity aren’t just how to prevent running out of money, but also how to anticipate the problems that come with living a long time. This includes physical ailments, mental incapacitation and even figuring out how to “age in place” – which means growing older where you live.

Staying in your home may mean hiring people to help clean out your gutters, maintain the lawn, drive you to the doctor, pick up prescriptions and bring you meals. All these things, once you can’t do them safely and reliably for yourself, must be farmed out to other people. Those of us who do not have benevolent family members have to hire people to help us out in old age, requiring additional planning and forethought.2

If you haven’t considered these things when it comes to retirement planning, it might be a good idea to do so. In fact, many Baby Boomers and Generation X are so wrapped up with helping their senior parents deal with these issues that they haven’t had time to plan for themselves. It’s easy to think that you’re learning important lessons about what not to do in old age, but you may need some help figuring out how to shore up your finances in order to create a better plan. We can help you with that.

There is a never-ending production line of strategies designed to help people better plan for their retirement. For example, the T. Rowe Price website features a host of tools, including one to help people prepare for retirement during each stage of life – from young adult to age 60 and up.3

To help you stay on track toward your retirement savings goals, consider using a retirement planning app on your smartphone. Popular examples include Personal Capital, Mint, Wealthfront and Wealthsimple. These programs enable you to sync up your savings and checking accounts with your 401(k) or IRA provider, allowing you to view all of your finances and investments in a single location. Bear in mind that retirement planning apps provide this holistic view to help you with household budgeting, planning and saving for short- and medium-term goals (like buying a house or funding college) in addition to retirement.4

As you get closer to retirement, particular care should be given to the investment vehicles you’ve been using throughout your career to accumulate funds. In some cases, it may be prudent to downshift some of your asset allocation to more conservative holdings so you don’t suffer market losses from which you don’t have enough time to recover. You also may wish to consider transferring assets from an employer-sponsored 401(k) plan to an IRA or some other vehicle that provides more investment flexibility or guaranteed income.5

One way to get a quick idea of whether or not you’re on track to meet your financial goals is through savings benchmarks that provide an ideal level of savings at different ages relative to your income.6 One example you can find on the web is the T. Rowe Price 30-second retirement planning challenge.7

However, bear in mind that these types of tools are based on general needs of the masses. True retirement planning should be more personal – based on your specific needs. If you rely on garden-variety advice and tools, it could lead to being underfunded or even overfunded for retirement – which means you could spend your working life being stressed out that you don’t have enough money, when you actually do.

One such benchmark is to have enough saved to provide for a certain percentage (e.g., 80 percent) of your pre-retirement salary. But what if you live below your means during the latter part of your career, so your pre-retirement salary is significantly more than your cost of living? Also, a simple retirement income calculator may not factor in what you will receive in Social Security benefits, so it could look like you need to save significantly more than actually necessary.

While retirement planning tools have their role, it’s a good idea to sit down to detail the expenses you expect to have in retirement and the income you expect to receive – just as you might do with any household budget at any age. And, of course, consult with a professional advisor to explore ways to help you manage and achieve this budget over a long retirement.


Content prepared by Kara Stefan Communications.

1 Mary Beth Franklin. InvestmentNews. Jan. 23, 2014. “Merrill Lynch hires director of gerontology.” Accessed Mar. 27, 2019.

2 Susan Wilner Golden and Laura Carstensen. Harvard Business Review. March 4, 2019. “How Merrill Lynch Is Planning for Its Customers to Live to 100.” Accessed March 7, 2019. [CLICK HERE]

T. Rowe Price. Feb. 6, 2019. “A Retirement Checklist by Life Stage.” Accessed March 7, 2019. [CLICK HERE]

4 Sarah Horvath. Benzinga. Feb. 13, 2019. “Best Retirement Planning Apps.” Accessed March 7, 2019.

T. Rowe Price. Feb. 14, 2019. “What Should I Do With My Old 401(k)?” Accessed March 7, 2019. [CLICK HERE]

Roger A. Young. Kiplinger. Feb. 27, 2019. “Age Targets: How Much Should You Have Saved for Retirement By Now?” Accessed March 7, 2019. [CLICK HERE]

T. Rowe Price. Feb. 6, 2019. “The T. Rowe Price Retirement Challenge.” Accessed March 7, 2019. [CLICK HERE]