Am I on track for retirement?
Now comes United Income, a new money manager backed by some of the biggest names in retirement, pitching big data as a solution. It’s deploying huge sets of stats on investment performance, retiree spending, longevity and other crucial factors to simulate innumerable outcomes. The software estimates the chances that each client’s personalized retirement strategy will actually succeed, then refines the plan if it won’t, based on as many as 18 million simulations per client, UI said.
That may sound familiar, but Fellowes, 42, has some street cred.
Morningstar Inc. acquired it in 2014 for $52.5 million, and Fellowes became the investment research giant’s chief innovation officer. Now, Morningstar is helping to back United Income, with more than a third of the $5.8 million raised so far.
Basic retirement calculators just do math, estimating how money might grow over time.
United Income asks clients about these factors and then uses detailed actuarial tables to estimate longevity. It does the same for spending, tapping government data to plot out how people might actually consume over the course of their retirements.
It gives advice on the best times to take Social Security payouts and make taxable retirement account withdrawals, and builds and manages custom investment portfolios using low-cost exchange-traded funds.
A common method is to predict spending based on a percentage of preretirement income, like 80 percent.