The Wall Street Journal highlighted a recent academic study at Texas Tech University WSJ Article, Damato & Tergesen that found the results misleading and incorrect in two thirds of the thirty six free or low cost tools which the researchers tried. In the examples highlighted, the online calculators significantly overstated the level of confidence which the data indicated would be safe for a secure retirement.
The researchers recommended being careful to avoid oversimplifying a process which requires commitment and effort to 1) provide an analysis that suits your individual circumstances and needs, and 2) understand the strengths and weaknesses of results obtained, and how to use them wisely.
The Will Doctor notes that our growing faith and dependence on automated simple solutions to complicated lifestyle questions is premature. A financial plan that is effective will take dedication and client involvement, and the development of a context that realistically presents the relative value of results under different assumptions-after careful development of the assumptions themselves.