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Designers of Retirement Calculators Strive for Better Fidelity to Real Life
Mind Over Market Link to more items from this source
Jan. 6, 2017
"To improve the accuracy of their forecasts, developers of calculators are using more complex formulas for model's assumption on the rate of return on investment assets.... To address volatility, some calculators perform a Monte Carlo simulation of a range of outcomes randomly chosen.... Some models base their rate of return on historic market data on the performance of asset classes over the past century. If the future is not like the past, then the accuracy of this approach will suffer."

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