Limitations of Retirement Planning Software: Examining Variance between Inputs and Outputs (Journal Article)

The present study examines the variability of inputs and outputs from five of the most widely used retirement planning software calculators used by U.S. consumers. Results indicate that due to differences in assumptions and inputs, the calculators produce outputs that vary dramatically for even very simple client situations, with greater variance for lower socioeconomic households. The results suggest that even for simple scenarios, American consumers would need a high level of financial literacy to successfully input and/or interpret the output without the help of a professional advisor.

Author: Rachel (Qianwen) Bi, PhD, CFP, MBA, is an assistant professor in the personal financial planning program at Utah Valley University’s Woodbury School of Business. She has been teaching financial planning software in the classroom for over 8 years. She won the Outstanding Symposium Paper Award at the Association for Financial Counseling, Planning, and Education’s (AFCPE) annual conference with the paper title of “Retirement Saving and the Use of Financial Software.” Her recent article “The Efficacy of Publicly Available Retirement Planning Tools” has been downloaded over 2,950 times within 5 days and made the Social Science Research Network (SSRN) Weekly Top 5 list. The paper has been cited in the Wall Street Journal and also mentioned by other finance-related media. Dr. Bi holds a PhD in personal financial planning from Texas Tech University. She also holds an MBA degree from Rawls College of Business of Texas Tech University with an emphasis in finance. With a bachelor’s degree in management of information systems from Dalian Maritime University, Dr. Bi found her passion to study the impact of technology on the financial services industry.

Author: Lukas R. Dean, PhD, CRC, RFC, is the CFP program director at Utah Valley University and an associate professor of personal financial planning in the Woodbury School of Business. Previously, he served as the CFP program director at William Paterson University in New Jersey. He earned his PhD from Texas Tech University, and has both bachelor’s and master’s degrees from Brigham Young University. He was named by Investment News as one of the 40 most influential professionals in financial planning under the age of 40. He also serves on the CFP Board Workforce Development Advisory Group and on the Investment News Diversity & Inclusion national advisory board.

Author: Jingpeng Tang, PhD, is a tenured associate professor of computer science at Utah Valley University. Before joining the university, Dr. Tang was a tenured associate professor in software engineering and information technology management at the University of Minnesota Crookston. He earned his bachelor’s degree in engineering from Southwest Jiaotong University, China, and his master’s and two PhD degrees both in computer science and engineering from North Dakota State University. He has taught numerous courses in software engineering, networking, computer science, and information technology. His current research interests include software engineering quality assurance, software security, AI, machine learning, blockchain, agent systems, 3D modeling, and simulations. Dr. Tang has published technical papers from international conferences sponsored by IEEE and other organizations. He is also PI and Co-PI for federal grants, including the Department of State (DOS).

Author: Hyrum L. Smith, PhD, CFP, CPA, is a professional in residence at Utah Valley University. He has a PhD in personal financial planning from Texas Tech, an MBA from the University of Utah, and a bachelor’s degree in accounting from Utah State University. He is the managing partner at Blue Barn Wealth Management in Salt Lake City, UT. He holds a CPA, CFP, and has passed Level 1 of his CFA. In 2018, he was awarded the Most Outstanding Professor of the Year in UVU’s Woodbury School of Business.