" Mr. Kotlikoff is trying to sell his software, called ESPlanner, to large employers as well as to the financial services industry. He has made no major sales so far. It is also available to individuals [..] for $150. "

Among many, in the "Guessing Games" graph: Right after retirement, around age 67, there is an item that says: "Set aside $100,000 for medical emergencies". So, if you set that aside you cannot touch it, right? Yet, the graph does not show a 100K drop (yet, it shows the 100K gain when one sells the house). Obviously, if you use up such amount, the line would hit the X axis 10 years earlier (85). Basically, you set it aside but assume you'll never need it. Pretty dumb....

Here is the Forum link (not much activity):
http://esplanner.com/phpBB2/

Is there no limit to the pretzelling that right wing economists will go through to shaft the middle class

no.

this has been another edition of "simple answers to simple questions."

Normally I think Stirling's blog is a good place to learn stuff, but he's throwing around the 'right-wing' accusation too fast and loose here. Looks like Kotlikoff's conclusions disagree with Stirling's beliefs about finance, so Stirling goes off the handle. Maybe Stirling has the same tendancy as the financial planning community when it comes to new ideas.
Look, Kotlikoff's method is to apply Monte Carlo simulations to the U.S. income tax rules. His software sifts through many possible scenarios and finds the optimal solution (maximal, stable consumption levels throughout somebody's lifetime). Surely Stirling can understand this.
It could be that Kotlikoff's model has some deficiencies, such as being "inadequate given actuarial trends and medical inflation" as Stirling telegraphically tells us. I'd like to see a follow-up from Stirling with his real criticisms, not just ad hominems and sour grapes.

ESPlanner does something that no other financial planning tool does. It doesn't make you guess what you'll need for retirement. Unlike financial planners who generally start by making a guess as to what you'll need, ESPlanner takes your current behavior (savings, investments, whatever) and your future behavior (travel, medical expenses, gifts to children, charitable contributions, bequests, funeral expenses, etc.) and tells you what your standard of living will be. Don't like the answer? Change your behavior until you get results you like. Want to save more early on, go ahead. Want to save for a rainy day, do it. ESPlanner doesn't control your behavior, just tells you the consequences of it.

You can even dink with all of the economic assumptions used by ESPlanner, unlike most planners (software and human). You don't believe Social Security will be there? Then 0 it out and see what happens, Medicare B premiums will double 10 years out, do it, inflation goes sky high, the code can handle it.

The upcoming update deals with Medicare B expenses and the projected burden for retirees is substantial (starting at about 4k at retirement now, using relatively optimistic real growth rates, winding up with about 16k/year at death).

Admittedly I'm not unbiased. I'm one of the principal designers for the code, but the last thing on Larry's mind is to tell you that you're not saving enough. You may or may not be, that is for you and ESPlanner to work out. As I said earlier, ESPlanner tells you what you'll likely wind up with making well documented and manipulable economic assumptions and given your behavior.

Besides, trying it is free. Buy it, use it for a couple of weeks to do some modelling, see if the results make sense and if they don't or you don't like the work required to do the data collection, return it and get a refund.

But blowing it off because it doesn't say what you're used to hearing (or already believe) is irrational.

Best,

Dick Munroe

p.s. The opinions expressed above are my own and don't reflect the opinions of any other person or organization.