A good retirement plan should consider:[2] Retirement finances touch upon distinct subject areas or financial domains of client importance, including: investments (i.e., stocks, bonds, mutual funds); real estate; debt; taxes; cash flow (income and expense) analysis; insurance; defined benefits (e.g., social security, traditional pensions).
Since planning is about the future, domains need to extend beyond current state description and address uncertainty, volatility, change dynamics (i.e., constancy or determinism is not assumed).
[citation needed] Retirees often face significant financial risk in retirement (unless they have guaranteed products like defined benefit pensions or lifetime annuities).
Quantitative specialists and actuaries will fit a statistical distribution to key random variables that impact results - such as market returns, human lifespans and inflation rates.
The Monte Carlo method is a common form of a mathematical model that is applied to predict long-term investment behavior for a client's retirement planning.
A more moderate school believes that retirement planning methods must further evolve by adopting a more robust and integrated set of tools from the field of complexity science.
Recent research has explored the effects of the elimination of capital income taxes on saving-for-retirement opportunities and its impact on government debt.