All financial planning software is FLAWED. The software asks a series of questions like how much do you want to invest, for how long and what is your desired rate of return? It then takes this information and begins STACKING your desired rate of return on top of the previous year’s ending balance over your investment timeframe. That would work except the market does NOT go straight up. It goes up and down. The fact that financial software does not allow for even ONE negative day in your 10, 20 or 30-year projection translates into a HUGE retirement shortfall over time.
So, unless you are calculating the future value of a fixed investment that does not lose value when the market goes down, you are wasting your time. The retirement projection your financial advisor prepared for you is probably not worth the paper it is written on.
You CANNOT accurately predict the future value of a variable product!
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