T. Rowe Price Offers Online Income Help
September 29, 2008
Baltimore-based mutual fund giant T. Rowe Price has equipped its website with a new tool that allows people who are planning for, transitioning to, or in retirement to estimate the monthly, inflation-adjusted income they can expect to extract from their savings.
The tool, which incorporates Monte Carlo methodology, allows users to also calculate the way specific factors—retirement age, number of years spent in retirement, asset allocation—will affect their level of retirement income.
By providing personalized results based on 1,000 simulated market outcomes, the tool arrives at the probability that a given income will be sustainable in retirement. These randomized outcomes result in a more accurate projection of individual performance than can be achieved by using average historical rates of return.
“The calculator is designed to provide users with maximum flexibility to determine if their current plans are on track to meet their financial needs during retirement,” said Christine Fahlund, a T. Rowe Price senior financial planner.
“If their projected income in retirement falls short of what T. Rowe Price thinks is a reasonable goal from investments and Social Security, investors can easily revise their assumptions and immediately see the impact on their results,” she said.
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