How do I interpret each of the numbers related to retirement that Path generates?

Our advice engine, Path, estimates several retirement numbers for you to compare how you’re currently tracking towards retirement with your retirement goals.

Net worth today: An estimate of the current value of all linked accounts as well as real estate and mortgages. Note that this may include a mix of taxable and tax-advantaged accounts so funds may have different tax treatments if they’re withdrawn.

Projected net worth at retirement: A projection of how your current assets plus projected future contributions to those accounts will grow until the start of retirement. The projected net worth at retirement is not adjusted for annual inflation.

Target retirement spending: The after-tax amount you would like to spend each month in retirement after adjusting for inflation.

Projected monthly spending in retirement:  A projection of how much monthly retirement income you can expect from your projected net worth and projected Social Security benefits. This is adjusted for projected inflation and taxes so you can directly compare it with your monthly spending today. Computations assume that you would not spend more than your target retirement spending, so that this value is at most your target retirement spending.

Percentage on track: Your projected monthly retirement income divided by your target retirement spending.

For more details on our methodology, please log into your account and review the Path disclosures.

Was this article helpful?

This communication has been prepared solely for informational purposes only. Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security or a financial product. Any links provided to other server sites are offered as a matter of convenience and are not intended to imply that Wealthfront or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise.

Wealthfront offers a free software-based financial advice engine that delivers automated financial planning tools to help users achieve better outcomes. Investment management and advisory services are provided by Wealthfront Advisers LLC, an SEC registered investment adviser, and brokerage related products are provided by Wealthfront Brokerage LLC, a member of FINRA/SIPC.

Wealthfront, Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.

© 2020 Wealthfront Corporation. All rights reserved.