Fidelity’s Free retirement planning Tool: An In-Depth Review
In today’s fast-paced world, effective retirement planning is more important than ever. Fidelity Investments, a longstanding leader in financial services, has developed a free retirement planning tool that aims to simplify this process for users. Let’s explore its features, benefits, and whether it lives up to its promises.
Overview of the Tool
Fidelity’s retirement planning tool is designed to help users estimate how much they need to save for retirement, assess their current savings, and identify potential shortfalls in their plans. The tool offers a user-friendly interface that allows both novice and experienced investors to navigate effortlessly.
Key Features
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Personalized Projections: Users can input their current savings, expected retirement age, and lifestyle choices. The tool then provides personalized projections of total retirement savings based on these inputs.
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Savings Goals: The tool allows users to set specific retirement goals, such as desired retirement income or lifestyle. It evaluates whether current savings are sufficient to meet these goals.
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What-If Scenarios: Fidelity’s tool enables users to run various scenarios to understand how changes in savings rates, retirement age, or investment strategies might impact their retirement readiness.
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Investment Recommendations: Based on the analysis, Fidelity provides tailored investment recommendations to help users optimize their portfolios for retirement.
- Educational Resources: The tool is supplemented with articles, videos, and planning guides that educate users about different aspects of retirement planning, from Social Security benefits to tax implications.
Pros of Fidelity’s Tool
- User-Friendly Interface: The tool is intuitive and easy to navigate, making it accessible even for those who may not be financially savvy.
- Customizable Inputs: Users can adjust multiple variables, leading to personalized findings tailored to individual financial situations.
- Comprehensive Resources: Fidelity provides a wealth of educational materials, which can empower users to make informed decisions about their retirement.
- No Cost: The fact that this planning tool is completely free makes it an attractive option for individuals looking to secure their financial futures without incurring expenses.
Cons of Fidelity’s Tool
- Requires a Fidelity Account: While the tool is free, access requires users to create an account with Fidelity.
- Visual Limitations: Some users may find the visual representations of data to be less engaging compared to other more visually-oriented financial tools.
- Limited Advanced Features: Although the tool is effective for basic planning, it may not cater to more complex financial situations or needs, requiring users to seek additional resources.
Is It Good?
Fidelity’s free retirement planning tool is generally well-regarded due to its user-friendly nature and comprehensive resources. For individuals just beginning their retirement planning journey, it offers a strong starting point to better understand their financial needs.
However, those with more complex financial situations or specific investment questions may find it less comprehensive than other paid financial planning services.
Conclusion
In summary, Fidelity’s Free retirement planning Tool serves as a solid foundation for anyone serious about preparing for retirement. Its personalized insights and valuable educational resources make it a beneficial addition to any financial plan. While it may not be suitable for every situation, its affordability and accessibility ensure that it’s worth considering for anyone looking to secure their financial future.
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Fidelity's old retirement planning tool was more functional and flexible, but for some reason they changed it late 2024 and made it worse and harder to use.
Hi John. Quick question for you. You have talked about Boldin and I am considering getting it. Have you seen any issues with connecting accounts to the software from a cybersecurity perspective? I want am looking for software that gives me an up to date total view of my finances and think the only way to do this is live data linking via my financial institutions. But I am a little worried about how Boldin accesses that data and what kind of exposure I would have. Have you looked into this at all?
Taxes and RMD are shown.
You have to go to yearly expenses and then table view
You have become more of a salesman, too focus on selling software as your new profession.
I've used both tools extensively. The paid Boldin subscription in particular is very powerful. But I think Fidelity has its uses as well, especially for people early in their journey. It's not so great for tax planning as you say although they do seem to consider taxes in your withdrawals (it's not listed explicitly, but taxes are included in the monthly expense & withdrawal graph / table). It's much less detailed and it doesn't allow for the depth of "what if" scenarios as Boldin, nor does Fidelity have a comparison feature. Fidelity DOES run Monte Carlo simulations though (250 to be exact) and the return rates are based on the historical returns in the asset mixes in your accounts. They vary the rates based on a selection you choose where "average" is the best possible setting, so it tends to run towards the pessimistic side. They do allow you to do variable expense planning and one time expenses, but it's kind of hidden down in the detailed expense planning page. As you say, there's unfortunately no way to explore Roth conversions which is a big miss for some of us. But it's free, so it's probably reasonable to expect it to have less features. One thing they both miss is an ability to segregate ordinary income tax rates vs LT capital gains/qualified dividend tax rates in the taxable account types. Boldin does allow you to specify if a taxable account should be taxed at the ordinary income rate OR the capital gains rate but it's mutually exclusive so the whole account is treated however you specify. I give them kudos for trying whereas Fidelity doesn't even go down that road.
Something interesting I've noticed is that the ROI that Boldin shows per year seems low for the selected estimated rate of return (at least in my case), so they tend to underestimate my taxes in my taxable accounts (with the ordinary income setting) as compared to what I've paid in the real world. But it's pretty close, so it's not a huge deal. I find I use Boldin (New Retirement when I first signed up) more of the time now as I approached retirement and now beyond. It's a very strong tool no doubt better than Fidelity overall but probably a little bit of an apples and oranges comparison since one's a free offering from a brokerage and the other is a paid, stand alone commercial product.
Are you compensated by Boldin Joe?
I use BoldIn too. I have also found ChatGPT to be really good resource to analyze your plan. I can load my retirement session up and say… I just received a 3% raise, how does it impact my pension — out comes the answer. Granted, it has to learn about you and retirement. It's cool to ask .. what am I missing? What could I do better?
I signed up for the paid version a couple of weeks ago. I like the Roth conversion explorer but would like to have some age controls. I have my own spreadsheet which is pretty complicated and I can enable Roth conversion to different tax brackets but don't have an ACA planner yet. I probably need to have age ranges in my spreadsheet to allow ACA management till age 65 then Roth conversions. I will say Boldin is the best consumer tool I have seen.
Don't pay attention to the haters, joe! Good information can't be explained in 3-minute blurbs! I use Fidelity tools, and they have been useful for me. Everyone has their own opinions and that's great!! People have to determine if any of these services have value to them. Just because they might not see the value doesn't mean they should crap on someone else because they do see the value! Keep up the good work!! Happy retirement!!
I have also used the planner tool and it is sufficient but nowhere near as comprehensive as Boldin. But the most powerful way to use fidelity is for simple to use budgeting using their ‘Full View’ functionality (it is emoney). I line up my detailed Boldin budget with Fidelity’Full view’ and I can look at my budget vs actual by clicking on one button in the online fidelity tool. Works amazingly well.
Does the Bodin planner have a Roth conversion chart?
Would love to see a review of the free Empower retirement tool!
I spent 30yrs at Fidelity – their oblivious lack of the basic systems design and programming, keeping them updated, was a reason I had to get out.
Joe, I found a major discrepancy, which I forwarded to Fidelity, but have not received a remedy for after about a week. I evaluated one of my accounts with their tool. While graphs are nice, I prefer looking at tables, so after running the scripts, getting the graph and selecting the option for the table display, I reviewed the mediocre results. Besides the limitation in “what-ifs” available, I noticed the balance to carry over from year one to two was inaccurate in its calculation, to the extent that the reduction of value was not my ~ of $40K, it was significantly greater ~$240K, or roughly 25% of the starting value of the account in year one. Gives new meaning to the loss in value one experiences driving a new car off of the lot.
Very sad for anyone using this tool who is not as meticulous as I was reviewing the output.
The tax planning Boldin offers is worth the price of admission. Hands down. Really eye opening.
My guess is 90% of Fidelity customers have never even looked at this feature.
Boldin does have a free version…
You had me at Grogu…..
I have most of my investments at Fidelity and I agree they have a great website. I also link my bank and credit card accounts so I can track all my spending on a transaction level, which is great. The retirement tool is pretty basic but it’s just a double check for me to give me confidence to spend. New retirement/Boldin is still the best tool on the market for doing the detailed planning and analysis and deep dives into Roth scenarios, RMD’s and taxes. I heard if you work with a paid advisor at Fidelity, they have a more detailed tool that’s similar to Boldin, I believe it’s called eMoney advisor. But you can’t beat the value you get for just $120/year for Boldin.
If you have any contact with the folks from the former New Retirement, tell them their name change is stupid. I've talked to several people and there has been universal agreement that changing their name to some meaningless word that nobody remembers if not immersed in the company/product.