BUSINESSWEEK ONLINE : JANUARY 22, 2001 ISSUE
BUSINESSWEEK INVESTOR Will You Have Enough? A 40-year old male earns $150,000 a year and contributes the maximum to a 401(k), which is invested in stock and bond funds worth $300,000. His annual expected return is 9.43%. He hopes to retire at 65 with an income of $120,000 in today's dollars (including Social Security). The projections are adjusted for inflation. HE'S GOLDEN USING TRADITIONAL FINANCIAL PLANNING... WEALTH: $1,700,000 INCOME: $123,000 CHANCE OF MAKING INCOME GOAL 100% ...BUT FALLS SHORT WITH A MONTE CARLO SIMULATION WEALTH: $1,440,000 (with a 5% chance of $563,000 and a 5% chance of $3,420,000) INCOME: $107,000 (with a 5% chance of $53,000 and a 5% chance of $228,000) CHANCE OF MAKING INCOME GOAL 40% DATA: FINANCIAL ENGINES, BUSINESS WEEK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _					RELATED ITEMS A Better Way to Size Up Your Nest Egg TABLE: Will You Have Enough? TABLE: Monte Carlo Resources INTERACT E-Mail to Business Week Online

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