In a financial context, refers to the allocation of savings or revenue for retirement. The goal of retirement planning is to achieve financial independence.
The process of retirement planning aims to:
Assess readiness-to-retire given a desired retirement age and lifestyle, i.e., whether one has enough money to retire
Identify actions to improve readiness-to-retire
Acquire financial planning knowledge
Encourage saving practices
Monte Carlo method
The Monte Carlo method is a the most common form of a mathematical model that is applied to predict long-term investment behavior for a client’s retirement planning. Its use helps to identify adequacy of client’s investment to attain retirement readiness and to clarify strategic choices and actions. Yet, the investment domain is only a financial domain.