Three Engineer Like Ways to Test Your Retirement Income Plan

By Dana Anspach

I’ve always found engineering fascinating, particularly when it comes to building something that will last. After all, when you build a skyscraper, you can’t have it fall. The same thing is true for building a retirement income plan – it needs to last.

Early in my career, I realized I wanted to find a more engineering-like way to deliver financial planning advice. I wanted answers based on data, not on speculation. Yet, when I started in the financial planning business in 1995, providing answers based on data was not the norm. At that time if someone wanted to know if they should pay off the mortgage or invest, the canned answer we were “supposed” to give was that they should invest. The reasoning was that you were likely to earn a much higher return on investments over time than the cost you would pay on the mortgage.

I hated those canned answers. And, most of the answers taught to us financial representatives at that time were canned. That’s because all of us young, well-intentioned (but ignorant) commissioned salespeople were trained to provide these answers so that we could sell more products for the company that employed us. Eventually, I figured that out and made the decision that I would only work in an environment where I could base answers on analysis.

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