The other day I was having a conversation with a friend of mine and the topic turned towards retirement.
I could tell, my friend was concerned about not having enough saved up for his retirement. Yet, he was doing everything right – from contributing towards his 401K, to funding his IRA and best of all, he knew the merits of indexing.
But there was a problem. He didn’t share my enthusiasm when it came to investing or about personal finance in general. “I don’t want to constantly monitor my investments”! His words!
Not that he didn’t invest, he did, but his investing technique was… rather chaotic!
Unfortunately, he is not alone. Millions of Americans are just like him – investing without discipline. I would’ve suggested going to a financial advisor, but then finding a good one is like finding a good used car salesman! Loaded funds, recurring fees, conflict of interests… Might do him more harm than good.
What then? Books? He would rather spend his afternoons mowing his lawn than read a book!
I suggested the Five Minute Retirement Plan. Here’s why:
- It is free
- Literally takes five minutes
- Enter your contribution amount and age, get a full blown asset allocation spreadsheet scientifically computed
- Simply follow the allocation
- Sleep easy at night!
Asset allocation doesn’t stay constant. It varies with age. The older you get, the more conservative your portfolio should be. Five Minute Retirement Plan is an asset allocation tool based on Modern Portfolio Theory. (MPT’s creators won a Nobel prize for this theory!) This tool builds and recommends one out of twenty different portfolios based upon your age, risk tolerance and the amount of time the assets are held in your portfolio.
You can also see a projection of the portfolio growth, and the amount of money you can withdraw safely each year after retirement.
Why Do I Recommend This Tool?
No, I’m not getting paid for this review and that’s probably why this wonderful yet free tool remains unknown. It not only recommends an appropriate asset allocation but also suggest which funds to buy. And I have to say, the funds recommended are well chosen. Low cost funds with good liquidity.
All you have to do is simply follow the recommendation!
What’s the catch?
No limited trials, no credit card required, you don’t even have to register! The funds recommended are not affiliate links either. There is no catch, none I can see other than some Google ads.
There are many sites that offer the very same service for a pretty penny! But the Five Minute Retirement Plan truly offers an excellent service for free.
The next screen shows the recommended asset allocation and a full year-by-year plan. You can adjust the allocation by indicating your risk tolerance. The allocation is adjusted accordingly.
Please take a moment to read the FAQ and the Methodology. It contains some very useful information on how and why the allocation was suggested.
Whether you are just starting out or a seasoned investor, this is a very useful site. What do you have to lose, give it a try!