General information and limitations
WealthStep is designed to be a general helpful guide and aid users/clients in improving their planning relative to their goals and needs. Depending on your circumstances, you may benefit from advice from a financial planner that considers information specific to your situation, if applicable, that WealthStep’s analysis cannot address. If you need such financial planning help with additional customization, read WealthStep’s document “How to Select a Financial Advisor,” or if you are a qualified WealthStep Direct Plus user, contact WealthStep to explore optional Financial Planning engagements through a WealthStep advisor.
Given the unpredictable nature of investment markets, inflation and other factors, users/clients should understand that advice is designed to improve outcomes, but does not intend to and cannot predict specific outcomes, despite what might appear to be precise numbers or recommendations resulting from estimated future projections and user inputs. Depending on your circumstances, you may benefit from advice from an objective, fee-only financial planner that considers factors specific to your situation and/or if your circumstances that are not adequately addressed by WealthStep’s advice process. In certain cases, WealthStep is available to provide such financial planning services on a project basis for an additional fee, or may suggest the use of an outside financial planner.
WealthStep calculations and expected/projected investment return estimates (see FAQ on projected returns) assume that you use an appropriate WealthStep portfolio for each life stage, i.e. an appropriate asset allocation for each life stage (and if spouse data is included, assume that spouse assets also utilize WealthStep life stage-based investing patterns), to promote sufficient growth, with the commensurate volatility risks, to combat other potentially more harmful risks in the long-run such as longevity risk and inflation, if historical patterns of the capital markets and inflation generally hold true in the future. Actual future inflation, investment returns, dollar values, and other variables may differ from WealthStep’s estimated projections.
WealthStep calculations cannot predict specifics about your future income, contributions, match, etc., and WealthStep defaults (if applicable) or your inputs, may be estimates for general planning purposes. WealthStep calculations do not account for increases in future earnings/salary other than inflation-based adjustments, however, you may adjust your expected retirement spending inputs in the Planning/Saving Advice module to account for any increase in future income/lifestyle that you expect to experience. As your income changes, it is important to revisit your WealthStep calculations, to determine whether you should increase your savings rate accordingly, consistent with your retirement planning needs.
“Other Income” in the Planning/Saving Advice module assumes growth at the inflation rate shown or selected.
If you include partner/spouse data, calculations assume retirement begins on the retirement date indicated by the WealthStep account holder.
If this savings sheet indicates a savings need that exceeds your ability to save, you may need to work more years and/or spend less.
Calculations assume pre-tax dollars, and tax rates will vary.
Longevity: It is not possible to reliably calculate your life expectancy. Be sure to consider a wide number of factors such as current health, lifestyle, and family history that could increase or decrease life expectancy when choosing between the default life expectancy calculation and choosing your own longevity estimate. While younger people generally have longer life expectancies than older people when those older people were at the same age as a person who is currently younger, the younger you are, the lower your statistical life expectancy. Said differently, the longer you live, the more likely it is that you’ll live to an older age. WealthStep’s default longevity calculation adds 5 years to the Social Security mortality statistics table for your age, to be generally conservative (i.e. leads to an increase in recommended savings rate, which reduces the risk of running out of money), but 5 years may over or under-state your actual longevity, which cannot be perfectly predicted. By saving more now, it could affect your current lifestyle (less to spend now). By under-saving now, it could affect your future/retirement lifestyle (less to spend in the future) and possibly lead you to run out of money during retirement. While mortality is impossible to calculate accurately in advance, it is highly advisable to utilize a longevity calculator or objective financial planner that adjusts for health, lifestyle, family history and other factors, to come up with what might be a more accurate life expectancy prediction for your particular circumstances, to input into the Planning/Saving Advice custom inputs. It is also highly advisable to update your WealthStep Planning/Saving Advice yearly, so that the advice better reflects your potential increase in age/life expectancy, and also reflects any increase in income/retirement spending goals, all of which will have the effect of requiring a greater savings rate to meet your retirement/financial independence spending goals. When a spouse is included in the calculation, life expectancy assumptions are based on longevity estimates regarding the spouse that has a later date at the end of life expectancy.
Social Security benefits are estimates, and Social Security is not guaranteed. Also, if you retire before (or after) the normal Social Security retirement age, your Social Security benefits will be different, and there can be advantages to taking early, regular or late Social Security benefits, depending on your personal situation and preferences. For more information, see the IRS website, including: https://www.ssa.gov/oact/quickcalc/early_late.html. If you have significant income outside of social security during retirement, a portion of your Social Security income may be taxed. Consult a tax accountant or financial planner for additional details (WealthStep does not provide tax advice and investing may involve certain tax consequences). WealthStep’s Social Security default calculations utilize assumptions. The Social Security factor should be higher if your income is lower than the example shown and lower if income is higher than the example shown. See the Social Security website for more specific details, to enter into the Planning/Saving Advice module as custom inputs. At the death of a spouse, the Social Security Administration may adjust benefits downward accordingly. See a tax advisor, financial planner or Social Security website for more information.
Consult a qualified, objective personal financial advisor to consider factors that may be specific to your situation… WealthStep is a valuable tool, but some people have special or complex needs to consider that require a live expert advisor and your needs may require more complex analysis tools.
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