Comprehensive Financial Planning for a Sustainable Retirement†

Tahani, Nabil; Robinson, Chris

doi:10.2478/fprj-2024-0002

Abstract

We demonstrate a comprehensive approach to the dual problems of saving enough for retirement and determining how much saving is enough at retirement date, using a probabilistic (stochastic) model. Our model estimates the probability of success of a comprehensive plan that spans the life cycle. Retirement plans are riskier than the financial planners’ deterministic models show, using a simple case study as a comparative example. Variables the family can control for a successful retirement plan are the patterns of pre-retirement saving and retirement consumption, the probability of running out of money in retirement that the family will accept, and the age of retirement.

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Comprehensive Financial Planning for a Sustainable Retirement†

Abstract

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