What are the odds you’ll have a successful retirement?

Questions you can ask your UBS Financial Advisor:

  • How will I be able to retire the way I want?
  • Should I be saving more and spending less?
  • Is it time to rethink the amount of stocks vs. bonds in my portfolio? 

Your planning report says your retirement plan has an 85% “probability of success.” But what does that actually mean? Is it safe? What happens in the 15% of the time when it fails? A portfolio analysis called “Monte Carlo” tests the robustness of a financial plan by simulating thousands of possible portfolio outcomes. It can give you a helpful idea about the likelihood of retirement success, but it doesn’t tell the whole story.

The new edition of Modern Retirement Monthly, “Understanding probability of success (PDF, 289 KB),” breaks down the advantages and limitations of the “probability of success” and what it means for you. For instance, while a Monte Carlo analysis can tell you a lot, it doesn’t tell you:

  1. The degree of a retirement failure—in the eyes of the analysis, a $1 failure is the same as a $1 million failure.
  2. The impact of flexibility—spending and saving behavior can change as needed.
  3. The impact of portfolio allocation changes—changes to the investment portfolio makeup can alter the trajectory of a retirement plan.

The best way to boost confidence in your retirement is to have a plan that adapts and changes as your life does. And that keeps you on track toward what’s most important.

Michael Crook, Head of Institutional and UHNW Investing Strategy, UBS CIO Americas, shed more light on the topic in a WMA On-Air interview.

Are you doing all you can to have the retirement you want? Together we can find an answer. Connect with your UBS Financial Advisor today or find one.