In the wake of market volatility due to COVID-19, the Recession Simulator provides insights into the effects of past market recessions
Personal Capital, a remote-first, industry-leading registered investment advisor and digital wealth manager, launched a new product feature and the first free tool of its kind, the Recession Simulator. Available to all Personal Capital users and wealth management clients, the Recession Simulator allows Americans to illustrate the effect historical past recessions would have had on their nest egg.
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The feature is now part of the company’s popular Retirement Planner, which runs simulations with your starting portfolio and incorporates expected return and volatility, annual savings, income (Income Events), spending goals, retirement spending, social security, and tax rules for taxable, tax-deferred, and tax-free investment accounts.
In a recent survey of over 1,000 respondents conducted by Personal Capital, the effects from COVID-19 on people’s retirement was shown as approximately 40.4% of those indicating they were planning on retiring within the next 10 years have ultimately delayed their retirement. Approximately 77% of the respondents who are at least 10 years away from retirement expressed some concern about COVID-19’s impact on their retirement goals. With recent market volatility due to the global Coronavirus pandemic, the Recession Simulator allows investors to visualize the impact past market swings would have had on their retirement plans and provides invaluable insights to help with future planning.
To use the Recession Simulator, users can access their Retirement Planner on their Personal Capital Dashboard where they can create a New Scenario to simulate portfolio performance during past market downturns (Dotcom Crash and Financial Crisis). Ideal to align with potential retirement ages, the user can select what age they would like to run the simulation, and generate the simulated plan that displays the portfolio’s balance during the market crash, the portfolio’s recovery time and overall portfolio probability of success rate relative to the user’s retirement goals.
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