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Personal Capital Helps Investors Worried about the “What If” of Future Recessions

Personal Capital Helps Investors Worried about the “What If” of Future Recessions

Not that we didn’t see it coming, but the National Bureau of Economic Research officially declared yesterday that the U.S. entered into a recession in February.

With the market volatility over the past few months, many investors have attempted to assess how the changes will impact their retirement plans. Seeing the need to offer peace amid uncertainty, Personal Capital made a move last month to help investors prepare their portfolios for the worst.

The company added a new tool, Recession Simulator, to its dashboard. The feature helps its U.S. users illustrate the effects that historical recessions would have on their portfolio. Currently the Recession Simulator allows users to mimic returns of the DotCom crash of 2000 and the Financial Crisis of 2008.

“With uncertainty around the market’s performance and overall economy, we want to continue to be a catalyst for providing individuals the necessary tools and insights to best position themselves to reach their financial goals under volatile market conditions,” said Personal Capital EVP for Advisory Service, Kyle Ryan.

The retirement dashboard also incorporates expected return and volatility, annual savings, income events, spending goals, retirement spending, social security, and tax rules for taxable, tax-deferred, and tax-free investment accounts. My favorite aspect of Personal Capital’s retirement tool is that it allows users to generate different scenarios to simulate retirement income under multiple circumstances. It helps users to easily compare situations such as: What if there is a recession every 10 years? What if I sell my rental property at age 50? What if I pay for a child’s tuition?

The new Recession Simulator tool is the result of a company-wide hackathon, and according to Personal Capital’s recent survey, it comes at a good time. The survey found that around 40% of people indicating they were planning to retire within the next 10 years have decided to delay their retirement. It also uncovered that around 77% of the respondents who are at least 10 years away from retirement expressed some concern about COVID-19’s impact on their retirement goals.

A Finovate alum since 2011, Personal Capital has amassed $12.3 billion in assets under management since it was founded in 2009. The company has 24,000 investment clients across the U.S. and 2.5 million registered users of its free financial planning tools.

Photo by Travis Essinger on Unsplash