Stefan R. Huber | Research Analyst
Imagine you are on a timeline of your life, walking through the months as you march towards retirement. You stop mid-stride, as a year-end bonus suddenly appears. What do you do? Will you spend it on a new bag, or sock it into a 401(k)? Simulations such as these are currently being experimented by Fidelity Investments, a large financial insurance firm. Their emerging tech arm, Fidelity Labs, is reimagining the way retirement is seen, literally putting the retirement-planner into the drivers seat. Here’s how virtual reality tools can help you better visualize your retirement:
Determining the Right Amount to Save
Many retirement planners will be familiar with retirement calculators. These can work to get you a number to work towards, but may not be in line with your actual goals. Roshni Pattath, a 35-year-old tech worker, began her 401(k) eight years ago, with her retirement age slated for 55. She tried Fidelity’s virtual reality tool at the All Things Open technology conference in Raleigh. “I was completely awe-struck by the whole experience,” Mrs. Pattath said. The tool helped her realize she wasn’t contributing enough to her 401(k) to qualify for her company’s match. “I’m trying to learn more,” Mrs. Pattath said.
Creating the Retirement Experience
To narrow the gap between the present and retirement, virtual reality can make retirement planning feel immediate. Adam Schouela, Vice President of Product Management at Fidelity, explained the goal of the virtual reality experiment. “The experience begins when you put your headset on and see yourself in a small room. Then you can personalize your settings, selecting your age, salary, the percentage of income you’re saving, your current portfolio and your tolerance for risk.” This gives you a large degree of autonomy in customizing your retirement profile. Experiencing the reality of your retirement plan helps you to craft a more accurate picture of where you are heading.
Preparing for Unexpected Events and Market Changes
Life changes. The markets could go down, and the next day they could go up. Miscellaneous expenses can arise. There are many fluctuations that are hard to account for, but virtual reality can help you to visualize possible changes. Mr. Schouela explains: “You find yourself on a balcony overlooking a vista with a green path stretching into the distance. You push a button and are transported, virtually, onto the path, along which you advance in five-year increments. At each turn, there’s a risk or a chance a ‘life event’ might happen, such as a tax bill or refund or a child’s wedding that could affect your finances. And each turn sets off market simulations that can speed you ahead or set you back. You can adjust your investment strategy or contribution at any point.” Seeing events pop-up in front of you and being forced to make real-time decisions is a great way to improve future vision. Virtual reality tools allow you to better account for any possible financial changes you may encounter on your retirement journey.
Virtual reality can be a great resource in planning your retirement? Would you utilize VR technology if your financial planner offered it? What is some other technology you’re excited in? Share with other members!
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