Setting Sail for Retirement- From Here to Honolulu

By Matt

Recently there were a couple articles that appeared in Kiplingers and the Wall Street Journal evaluating different online retirement planning tools, including:

  • ChooseToSave.org (Free)
  • ES Planner ($149-$199)
  • Fidelity’s Retirement Quick Check (Free to registered Fidelity.com users)
  • Financial Engines ($150-$300)

I asked two of the Independent Financial Advisors that are helping us to develop our next-generation retirement planning service and one of them came up with this analogy:

If you decided to sail from San Francisco to Honolulu, you would first have to set a course in the direction of your destination. Of course, as any sailor will tell you, you’d be a fool to just set your initial course and expect to wake up in Honolulu X days later. Because of storms, currents and trade winds a sailor has to regularly get their bearings and re-adjust their course. In order to chart the shortest course and make sure you don’t end up in Australia, people need tools that are easy to use, but have a high level of sophistication so they can make sure they’re on track.

The problem with the online retirement planning tools I listed above is that they project a future moment in time and then wish you good luck getting there. This is almost exactly like the scenario where you set a course for some distant land and hope that either you encounter no weather (fat chance) or that you accurately guess all the different currents, wind patterns and storm fronts. Moreover, most people really aren’t qualified to make accurate decisions as to the what they’re going to encounter, particularly related to personal finance (what percentage of your present income will you need in retirement? 60%? 85%? 100% When will the percentages change and by how much?).

The biggest problem I see with these tools is that there is no ongoing process that helps keep consumers on track for retirement. Most people don’t even complete Financial Engines or Fidelity’s planners and the ones who do usually don’t come back to update their plan. It’s a case of set it and forget it.

By offering an interactive process based on what people want to do in retirement, the team here at Boulevard R feels that we can help by getting an initial snapshot and then create a personalized savings and investing plan, while offering the ongoing support that people need in order to achieve a meaningful retirement. Our private beta already does most of this. Our goal is to have the same discussions with you that a financial planner does when you sit down with them to evaluate what has happened since the last time you met and what adjustments you need to make. We see our job as providing ongoing support so that people can get the independent, personalized advice they need without paying an Independent Financial Advisor $100-$200/hour to sit down and review their financial situation.

In coming blog entries, I’ll actually evaluate the different tools and describe how they compare with our approach at Boulevard R.

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One Comment

  1. Cynthia Iverson
    Posted August 21, 2007 at 10:50 pm | Permalink

    Retirement issues are confusing. Simplifyng the process while offering a concrete plan; offering the tools needed to travel a very complex road and following through with a recommended savings/investing plan is just what is needed for the baffled pre-retiree!

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