The goal of the Lifecycle Retirement Portfolio Probability Calculator is to show the results of a model portfolio built with the same asset allocation as the John Hancock Lifecycle Retirement Portfolio, the fund manager said, in a press release. The Calculator determines the probability that such a portfolio would last throughout retirement, given different retirement lengths and annual withdrawal rates.
By adjusting the sliders to view different annual withdrawal rates and distribution periods, investors will see a projected probability of success, defined as a percentage chance of retirement portfolio survival, according to the announcement. The chance of portfolio survival is projected using Monte Carlo simulation, which is useful for modeling outcomes with significant uncertainty and variety of inputs.
Carey Foran Hoch, Senior Vice President, Marketing, John Hancock Funds, said in the release that the calculator runs more than 5,000 simulations for 14 different asset classes. “During retirement, making your money last is critical. The insights gained from our Retirement Portfolio Calculator can help investors select a lifelong investment solution and more efficiently plan for their retirement,” according to Hoch.
Visitors to the John Hancock Funds site (www.jhfunds.com) can find the calculator by selecting the “Retirement Planning” tab at the top of the home page, choosing “Tools and Calculators” and then “Preparing for Retirement.”