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How do I use the Plan Wellness Chart?
How do I use the Plan Wellness Chart?

This article explains how to read the plan health chart on the dashboard.

Nancy Gates avatar
Written by Nancy Gates
Updated over a week ago

The Plan Wellness chart shows your projected savings balances over time compared with a downside risk scenario.

What am I looking at?

  • At NewRetirement, we examine your plan in multiple ways, including plan projections as well as Monte Carlo analysis.

  • The Projected Savings is a linear projection based on your plan inputs. Most of the charts you see throughout the app are based on plan projections. The savings balances here will match the balances in the net worth chart lower on the dashboard.

  • Monte Carlo analysis is a statistical technique where we run multiple projections, randomly varying asset returns and inflation rates based on your growth rates and a normal distribution. We run 500 of these simulations and use the results to generate the probability of plan success. The 'Poor Outcome' you see here represents the 10th percentile of these simulations - or in other words, 90% of the simulations did as well or better than what you see here.

What next?

We use this chart to demonstrate both your projected savings as well as expressing the risky nature of long-term financial forecasting. If your plan consistently results in success, even across the varied Monte Carlo simulations, that's great - you can rest easy, or explore ways to increase expenses, charitable giving, or reduce investment risk (and associated return). If you find yourself with downside results happening too frequently - where perhaps 20% or more of simulations result in running out of money prior to your longevity age - explore ways to save more, spend less, or increase your asset returns.

In all cases, the plan wellness chart is provided as an analytical tool to determine how likely your plan is to work. Play with your plan inputs and review the results in this chart to find the right opportunities for you and your family.

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