A recent review released by the Financial Planning Client Advocate has found that free online retirement calculators may dramatically overstate somebody’s financial position at retirement, which would give people a false sense of security.
Financial Planning Client Advocate spokesperson Tyron Cleine CFP commented, “retirement calculators attempt to oversimplify a complex area of financial planning…the fewer questions a calculator asks, the more assumptions it must make, which means less accurate results”.
Mr Cleine explained that the lowest scoring calculator tested simply projected consumers superannuation balance only and made no attempt to account for non-super assets or age pension entitlements. Cleine added that “My Retirement Simulator” offered by AMP was the top scoring calculator.
Mr Cleine also pointed out that if somebody wants an accurate retirement projection, then they, should consult a licensed financial planner who specialises in retirement planning.