 Welcome to the 62nd edition of the Bokel Heads on Investing Podcast. Today our special guest is Steve Chen. I'm John Luskin and I normally host our Bokel Heads live show for the folks of Twitter. I'm on my final episode of taking over for the normal host of the show, Rick Ferry, while he takes a summer sabbatical. Today our special guest is Steven Chen, Steve is founder and CEO of New Retirement, a do-it-yourself tool for retirement planning. Some announcements before we get started on today's show with Steve Chen. This episode of the Bokel Heads on Investing Podcast, as with all episodes, is brought to you by the John C. Bokel Center for Financial Literacy, a non-profit organization that is building a world of well-informed, capable, and empowered investors. At BokelCenter.net where you'll find valuable information including transcripts of podcast episodes and at BokelCenter.net slash donate, you can make a tax-deductible donation to support the mission of improving financial literacy. And finally a disclaimer, the following is for informational and entertainment purposes only and should not be relied upon as a basis for investment or personal financial advice. And with that let's get started on our interview with Steven Chen. Steve Chen, welcome to the Bokel Heads on Investing Podcast. John, great to be here. I appreciate the opportunity to be on your show. And I'm looking forward to seeing you again at the Bokel Heads conference this year. Yeah, it was great. Last year was the first time I went. It was great to be there, meet a lot of folks that we've had on the podcast and just met in the community. And also it was the first time I'd ever in person met a bunch of our users at one time. So it was great to get their feedback and hear what they thought about the platform. Steve Chen, tell us about yourself. My career has been in two big areas. One is financial services, building software for larger companies like Charles Schwab and Wells Fargo and things like that. That's how I started as a consultant. Then I built a really early SaaS company that helped high school students basically do college research and apply online and so forth. And then was back and consulting and saw this problem in my own family with my mom, like, how do you get ready for retirement and how do you make the transition to retirement? And she came to us with this challenge, which is like, I need financial help and guidance. We tried to outsource the problem by finding a financial advisor that would help her. But pretty much everybody we talked to, their business model was based on assets under management and she didn't have a lot of assets. So she couldn't get the help. So we ended up doing it ourselves on a spreadsheet. And so we basically did this and then said, hey, there's 120 million people in this country over age 50, they have 8% of the money, but everybody's still worried about retirement. So looks like there's a problem that's unaddressed and started building this as a project and then it's become a much larger company since then basically have built like a turbo tax for planning. So anyone can build their own financial plan for free. Or you can pay us like turbo tax 120 bucks a year and use the software. Or if you want it to talk to like a coach or a CFP on a flat fee and kind of hourly basis, you can do that. And that's where it stops. We don't manage money. All we do is help people think about their plan and frame up their choices so that they can understand where they are, understand what their options are, see different scenarios for, if I work longer, if I downsize, if I invest differently, what does that mean? But yeah, that's the journey so far and we appreciate that opportunity to be in front of the bullheads community and also learn because there's so much information and knowledge in this community. It's really like one of the big unlocks would be how do you get all that knowledge out to the mass market? We started attracting users that had their own spreadsheets and work into it like planning enthusiasts. And so that informed the evolution of our products. So it got steadily more powerful, right? They're like, oh, well, we wanted to do Monte Carlo. Oh, we wanted to do scenarios. Oh, we wanted to do tax modeling. We wanted to know if I buy an annuity, how does that affect my plan? Real security earlier versus later, if you move from a state where there's state income taxes to where there's not state income taxes like Florida, we need to help people frame all this stuff up in a completely unbiased way. There's a lot of providers that will give you planning, but then they're selling something like roll over to my 401k or buy my annuity or whatever it is, right? So we didn't do any of that stuff. If something's free, then you're the product. And I think that's one of the fundamental things that we arrived at. We addressed that by saying, all right, we're going to charge consumers. Now it's a much longer, slower road that we're taking. That's where we want to start. Charge consumers, be transparent about it, low fee, easy to understand, not overly complicated. That's what we're about. Let's jump to some questions from the BokehLeds community. This question is from Lindsey Young from Twitter, who asks, I love to know Steve's thoughts on whether do-it-yourselfers really understand risk enough to be able to make their own retirement plans that incorporate not just investing, but tax planning, insurance, and estate planning too? We want to take people as far as they want to go. It's much simpler and less scary to just sit down at your laptop and punch some numbers into a calculator and see what it says and start learning about yourself and your own financial situation, but also starting to see what some of these interrelated mechanics are and how these things hang together. For many of our users, they get so far down the path and they're like, wow, good news is I'm framing up my situation and I have opportunities, but the bad news is some of the stuff gets pretty complicated and some of these numbers start to look big. Social security optimization is out there. There's how should I fund long-term care? How do I fund longevity and all that stuff? The way we have approached this is to say, okay, look, there's software and then, hey, if you want to just drop into office hours, you can do that, or if you want to take a class, you can do that. We're bundling classes with the software now. Bundling classes are free. There's a community on Facebook when they learn together, because that's the most trustworthy source, right? It's not even us. It's your peers that are going through the same stuff. The industry historically is one-to-one, right? Like I need help and I'm going to talk to a single advisor and that doesn't scale, basically. Given the amount of people that need help, you need to be teaching people and mass and using technology to learn about them and help them learn about themselves. And to learn more about do-it-yourself retirement planning, check out our interview with Derek Tharp. I'll link to that in the show notes for our listeners. That was part of our Bogleheads Live series. This question is from Rick Ferry, the normal host of this show. And he writes, I'd be interested in hearing Steve Slott's about a robo, AI advisor, replacing human advisors for routine personal finance. I think this is a matter of when not this is definitely going to happen. We're already starting to see AI co-pilots for things like writing code and they're getting better and better. But every position where you're delivering advice and it's not just financial advice, it could be doctors and lawyers or you're processing a huge amount of information, I think you will end up having AI helping you. We'd use it today. We use our phones all the time. Maps are telling us how to go and then they're dynamically solving for traffic. That's a lot of the way I see what we're doing is that you're trying to go somewhere and get wealthier, take care of your family, right? But along the way, there's all kinds of things changing around you. The markets are moving, tax rates are changing, regulation is changing. So how do you adapt to that and make more optimal choices? I think that's where technology can really be helpful for individuals and experts that are helping those individuals. This is actually happening now with advisors where we're also providing our platform to advisors. And some executives are like, what happens if this platform starts getting smarter than some of the advisors? Look, there's incredible advice out there. We're not outsmarting advisors, but there's different kinds of advisors. So, you know, we might be coming up with ideas that it's not their specialty. I think a lot of the software is smarter than some of the advisors today, but that's a whole other conversation. Fender Strat Guy from Boglehead's Reddit writes that Bogle Markowitz, for example, they each have their own take on what a perfect retirement portfolio should be. I'd be interested in hearing what Steve Chen recommends. And speaking of Bogle and Sharp, they were both previous guests on the Boglehead's On Investing podcast. Jack Bogle on episode one, and recently we interviewed William Sharp. I'll link to those episodes on the show notes for our listeners to check out. I'm far from perfect like many people. I have my own biases that influence my behavior. And I was a DIY person. If I had been using an advisor earlier, I might have made better choices. But after doing my own podcast and talking to lots of experts like yourself, where I am today is I am largely equity heavy. It's things like index funds, so BTSAX, buying of the overall market, generally have long-term perspective. When I was younger, I worked at Schwab as a consultant right out of school. And so I was like, I got a brokerage account. And then I learned, oh, I can trade options doing stuff like that. I traded forex at one point, you know, gambling. That's like crazy stuff. And, you know, I'd be paying attention to the market and all this stuff. Now, I don't even think about it. Like, I don't even watch it. I have belief in the US and world economy and that capitalism is a good allocator of resources. And generally, you get more productive over time and that those returns will accrue to the investor. And the most efficient way is to get your money in the market and pay low fees. But very much have to set it and forget it. And I don't really need this money for 20 plus years. And consequently, I'm now doing way better. I have some alternative investments because really probably for social reasons, as a founder, I've done some angel investing, which is super risky and not recommended. But it's not a lot of money. I also have done some real estate stuff, also debatable. A lot of people spend a lot of time thinking about their portfolio and trying to get it just right. I think I'm more of a get in the market, keep the fees low and you'll be fine. It's better to just try to solve for the most efficient risk-adjusted rate of return. And the best way to do that is to get wide market exposure, keep your fees low and not move your money around very much. And then you should be mostly fine. And this is the advantage older people have as they've seen it before. When you're younger and you live through like a crypto collapse or something or the dot-com bubble, it shocks the system and it can change your behavior. When you're older and you've seen the market tank and recover, I think you get a lot more, OK, I'm not going to worry about it. The market can go down 30% and you're like, whatever, I think it'll be fine. Username bureaucracy now from BogaHeadsReddits writes, I'd be interested in hearing if Steve thinks there are specific thresholds. I wish it makes sense to check in with a financial advisor. And we had a similar question from Jerry L from the BogaHeads forums about how often you should get an evaluation done on your retirement plan. People should think about this, even at the very beginning, whether it's an individual advisor or community, it's worth getting educated. And more importantly, getting started. So I think a lot of people learn what to do and they don't necessarily take action. I think that's one of the biggest things that an advisor does for you. They can be your accountability coach and be like, OK, we are going to look into the company match and look into your company plan and say, OK, start saving, take advantage of the match, make sure your portfolio is set up effectively, especially if you're young, mostly equities and hopefully low fee funds and at least get going on the right path as you go through your life. At those points where you have big decisions, you're having a family, buying a house, your kids are going to college, you're thinking about retirement. You're thinking about your parents and taking care of them. You're thinking about your own long term care needs and longevity. It's definitely worth it to check in with folks. And it doesn't have to be full service, AUM based advisor, it can be a flat fee kind of situation. If you don't have a lot of money and you're paying $1,000 to talk to someone, that's a relatively large amount of money. But if you start to have more money, then it becomes negligible because if you can avoid making some big mistakes, that's a big thing. I think the other big thing is set up like a safety valve for yourself. The whole move from pensions to defined contribution 401K plans, basically set it up so that every individual had to become like their own CFO and learn about this stuff, which is kind of a crazy idea. And then if you made good choices and you save a million dollars, great, you can still screw yourself by making mistakes later where you start taking too much risk when you don't need to because you're bored. Some people, they're bored and they're like, I need to start messing around my money even though it's doing fine. And then you're like, I just started messing around $2 million and now I have a million and a half dollars. And you're like, wait a sec, then you're emotionally tied up and like, I got to make another half a million bucks back, talking to another person who hopefully help you avoid making that mistake in the first place or rationally approach fixing it up can be really helpful. So certainly taking the right amount of risk, that is part of investing 101. And to learn more about investing 101, I will link to the Bokeh Let's investing philosophy on the show notes for our listeners to check out. Wally Conway from Bokeh Let's Facebook writes, when will there be a military feature similar to the social security feature? So we do have veterans or active military in the community. We try to do things like try care for healthcare. It's not specifically documented, but we have workarounds on the platform. So you can opt out of like, I don't have Medicare, I have another means of paying for it and then you can manually enter your plan there. I wouldn't say we reflect every benefit that you get from being in the military. It is definitely something we think about. We have so many ways to make this platform better and we're working hard on it. Send us your feedback. If you're a user, log issues directly, we use a chat interface. You can message us directly or actually you can see features that have been logged by other people and vote them up and down. You can also log your own ideas for how to make the platform better. This one is username JustinJHYN from Bokeh Let's Facebook who writes, what kind of expected return should we be using for 10, 20 and 30 year retirement planning for each asset class? US, international, small cap value, total bond market, etc. So we basically do it account by account. So our users very often have multiple institutions that have money to Schwab and Fidelity and Vanguard or some X and other places and then they have different kinds of accounts, taxable and then qualified, so tax deferred and then tax exempt Roth. So we default rates of return using historical norms and the platform also has inflation built into it and you can basically set inflation for expenses, for housing, for social security and for healthcare. We inflate those things differently. You can set those and then for returns, we default them to historical averages four to seven percent and then people can change it. So if you take it up, what we do is we imply a riskier portfolio for you. So if you're like, oh, I think I'm going to do six to nine percent, we're like, this is a super equity heavy and therefore it has the same volatility characteristics of a portfolio like that. And then we do that for every single account that you have and then we run Monte Carlo across all of it. Justin's question gets to an important point when it comes to using financial planning software. The investment returns that you assume for U.S. stocks, international stocks, et cetera, is going to have a big impact on what that retirement planning software says about your particular retirement plan. For example, we interviewed Chris King Benz on episode four and episode 37 of the Bullgaid's live show where she used Monte Carlo software to answer the question, how much can I spend in retirement? And over the course of a year, her research made different assumptions about what future investment returns are going to be. And the result was you could spend a different amount because of that. So the data that you put into your financial planning software matters because it's going to affect that output. I think thinking about retirement spending is evolving. Everyone has been focused on accumulation in financial services, like accumulate wealth and how much nobody can answer. It's just as much as possible because that's how the whole industry is paid. Now with generational changes, people are like, okay, I'm going to draw down that wealth. How am I going to de-cumulate money? Even in our software, we talk about chance of success, which is one way of framing it. The reality is it's not that if you fail, everything blows up in your destitute. It's the percent chance of being able to maintain the level of spending that you're targeting. So if you can't do that, then what happens? Well, the reality is maybe it only has to move five or 10% for a couple of years and then you're back to being on track. And I think that's a much better way of framing it. The market doesn't return well enough and you're nervous. You have to take your spending down a bit. To your point, that Monte Carlo simulation, whether it's an 80% success rate, et cetera, doesn't mean in 20% of the time you're going to have to be living under a bridge. It means that there's a 20% chance you'll need to make a change to your spending plan. One thing I've noticed in that percent figure, Stephen, I'd be curious about your thoughts on this, is that the lower that percent is not only going to be the likelihood you need to make a change, but also the degree of that change. If you've only got a 50% success rate, you'll probably have to make a change. You'll probably have to be a big change. Has that been your experience in playing with the Monte Carlo software modeling tools? Yeah, I think that's generally true. The reality is for many people, they have a lot of lovers they can pull. How aggressive am I invested? How long should I work? Should I work part-time? When do I claim Social Security? What we see is people are constructing these plans and thinking about all the things they have. And for many folks that have had long careers, they also don't want to necessarily just hang it up completely. I was listening to Cody Garrett podcast, you guys just rolled, and he talked about this, where people, they want to have something to retire to. They miss the social engagement and the intellectual stimulation of work. And so you retire, you're making $150,000 a year, and then you'll start consulting, and suddenly you're making $50,000 a year, and then you're claiming Social Security. And then you're thinking, maybe I shouldn't claim Social Security yet because I can defer that till 70, and maybe that's a better decision. So people's situations change, and their human capital does remain important. I think that is one thing about the whole fire community that people need to be aware of is you are taking risk by not continuing to save. If you retire really young, you don't get to renew that human capital. So just be pretty thoughtful about your scenario modeling. Steven mentioned our previous episode with Cody Garrett, I'll link to that in the show notes for our listeners. Folks can check that out. This question is from username 2pedals from the Boga Heads forums who writes, what are the top three biggest risks for people in retirement? And how can they avoid or mitigate them? I actually have four risks. So I'll list the risks and then some ideas. So longevity. We don't know how long we're going to live. People, maybe talked about before, are really trying to hedge that risk out. So inflation, we're definitely seeing that in the COVID era, especially food inflation and housing inflation. It's real, and it has a material impact on people's lives. Long-term care, especially if you need memory care or someone in your family needs memory care. I think a lot of boomers in Gen Xs are going to start to see this in their parents. Oh, you know, my relative, my mom has Alzheimer's and we're looking at memory care. And by the way, that's $15,000 a month and you're like, holy smoke, 180,000 bucks a year, right? You're going to decimate portfolios this way. And then I think fraud and elder abuse is a real and growing threat. I'll go backwards. So for fraud, elder abuse, older people have more money, their decision-making may decline over time. And you need to be pretty thoughtful about how you hedge yourself out. And again, your parents, right? So monitoring, spending. One thought I've had about this is think about this like governance, right? Like having a board for your money. When you're younger, it's you and your spouse, right? And then as maybe with your family, it's other people in your family, but having multiple trusted people that are keeping an eye on things, people that are aware and can help you make decisions. And that could be an external CFP, a CPA. But the whole thing about your mental cutie and functioning is that if your decision-making declines and you don't realize it, then you can have huge problems and a lifetime of savings can get misdirected or abused or get destroyed, which is not something you would want if you were aware of it. Being able to assess yourself through your doctors and through outside experts and people in your family is super important. Long-term care, potentially deferred annuity, maximizing social security, just generally having a plan and thinking of this through in advance. Again, it's a real cost. Probably stay invested in the market. So you're going to capture higher returns, be thoughtful about what your mix is between fixed income and equities, but maybe bias equities a little bit more longevity. We talked a bit before about the deferred annuity, maximized social security, staying invested in the market, having a plan, just thinking about this and being aware of it is important. So you have a sense of control. For a lot of users, having a sense of control and understanding of their money and what's happening with it is a big benefit. We touched on these topics in a couple of previous episodes, Episode 34 with Cameron Huddleston, author of Mom and Dad. We need to talk how to talk to your parents about their finances. And then also Mike Piper was interviewed on Episode 58 of this show about his book, More Than Enough. I'll link to those shows in our show notes. This question is from username Chigo from the Google Ads forums who writes, as do it yourselfers, what steps can a 50-something couple take now or later? They don't have children or family to handle their finances as they age. This goes back to that governance idea. Assemble a trusted group of people that are fiduciaries. So it could be a CFP and a CPA and a lawyer. Have three people involved. You want to have other people that understand how the money works, understand what you want, or keeping an eye on things to make sure that there's no abuse happening. I worked with a gentleman who had a similar situation, knows him and his wife, given her disinterest in personal finance and investing. He went over to his bank's trust department to set up a plan to have the money managed when he was no longer going to be able to. One thing we discussed when working together is putting in fine print just how he wanted that money managed. Because if you don't tell that corporate trustee, hey, use low-cost funds, preferably index funds, then it's certainly possible they're going to default to their higher fee funds and you're probably not going to be happy when your spouse is paying those high fees. That's a great point. Trusts are this area that are growing and they're big businesses. There's a lot of money parked in these things and there's high fees and everything else. So it is a valuable service, but yeah, you do have to keep an eye on it. I remember talking with Rob Berger. He's participates in this community. He talked about, I think it was the big blue book or the blue binder where he's written down for his spouse, how it all works, where the money is, how to get access to it, how he's invested in why and what the instructions are and that can be for your spouse or you can set that up and give it to somebody else like a corporate trustee or your own governance board, wherever it is. And at this year's Bogey Live conference, Mike Piper will be leading a special session for those not necessarily financially nerdy spouses. We spoke with Mike Piper on episode 36 of the Bogey Live show where we discussed Mike's book After the Death of Your Spouse that talks about just this subject. I'll link to that in the show notes so folks can check that out. This question is from username MKC from the Bogey Live's forums, a moderator. Thanks for help moderating the forums, MKC, who writes, with the concern regarding online security of financial data, why require you to create an account and store your personal data on their servers first making a local protected data set as an option? We're a SaaS, so software is a service company and that means we create one instance of our software on our servers and there's a data store on the servers and everything operates off of that and we do that for scale reasons and for quality control reasons. So for us to support third party data stores, that's just like another enhancement on the roadmap and we haven't prioritized it yet, it would still introduce some risk because you're transmitting the data back and forth and then you're relying on your own data security at your desktop. In our business we've passed SOC2, which is a method of ensuring that we're doing the right best practices to keep data secure and people on our team are trained up. We also work with big companies like Nationwide and RTX, Raytheon and they have their own security protocols that they make us pass on a repeated basis to make sure that we're securing the data. So there's a lot of industrial strength security stuff going on here and we've designed in a way that you can abstract this so you can come create a burn email account that's not associated with you, create an account with that email. You don't have to link your accounts, you can just punch your numbers in and get a ballpark idea of what's happening. That's an abstracted version of your plan that's not linked to your personal identity and manage it that way. Certainly staying safe online is an important consideration. That's why in episode 43 of the Boca's live show we interviewed Stephen Ryder, a cybersecurity expert, so folks can check that out. I'll link to that in our show notes. This question is from username Lucky1 from the Boca's forums who writes, what are the best resources for aiding in planning Roth conversions in retirement? The high level strategy is for many folks their savings are in qualified accounts like your foreign care IRAs and those are subject to RMDs, requirement distributions that start happening around 70 and then accelerate from there. And if you live a long time, it could be taking out over 20% of your portfolio this year and turning it into income. If you have a lot of money that can create a massive tax effect. So the high level strategy is try to move money out of qualified accounts into a Roth. So basically it grows tax free and come out tax free. It also has benefits. If it goes to your estate, it can go to your state in very tax efficient way. In our platform, we built a Roth conversion explorer, which looks at all your money, looks at your future incomes and marginal tax rates. And then lets you solve for lowest lifetime tax liability or you want to solve for maximum estate in different kinds of scenarios, you can plot out the kinds of conversions you can do and what the impact will be to your taxes for that year and long term and make these trade off decisions. At the risk of making the sound like the Mike Piper show, Mike Piper did a phenomenal presentation at last year's Boogaliz conference about Roth conversions. I'll link to that video in these show notes. If you're listening to this recording, you still have a couple weeks left to register if we're not sold out of tickets by the time you're listening. Wood spinner from the Boogaliz forums writes, are you able to leverage your software to calculate a funded ratio? A funded ratio is just another way to calculate if you're on track for retirement, not to say it's any better or any worse than a Monte Carlo simulation or perhaps even a linear projection using some conservative rates of return on a spreadsheet. Funded ratio just says, what is the total cost of all my future expenses today compared to what is the total value of all my investments today? I think that's a great question. I would say one thing that we're working on right now, which you'll hopefully see in the distant future, is a bunch of metrics around financial wellness. So things like funded ratio, debt to income, what your risk is of running out of money, these metrics, letting people explore them and see what's driving it and then giving some insights to other changes they could make to how they invest when they're planning to retire, how they're planning to draw assets, how they're positioning their assets to adjust their risk and achieve better long-term outcomes. So you will definitely see that and if you're on our site and you want to suggest ways we could do better, we're definitely open to it. Private ID from the Boogaliz forums asks about how financial planning software looks at not just one single financial planning question by itself, should I do a Roth conversion? How much? When should I start social security for the lower earner? What healthcare option should I be doing in retirement? How does retirement planning software look at all these pieces together? Generally, what we're doing is getting as high a resolution picture of someone's situation as humanly possible all across your income, expenses, assets and debts. And we do let people change things like, oh, I think my expenses will change over time, right? So my expenses are one way now, my kids go to college, they go up, my kids leave college, they go down, I retire, they change, whatever I move, all this stuff. So we're trying to understand what your plan is generally. And then what we do is we use compute to run lots of scenarios. So the one we're solving for things like Roth conversions or what is the maximum income I could have, we basically run scenario scenario and then pick the best result for you. We touch on an important point here that Mike Piper made at a presentation he did at the booklets conference last year, you've got to use some sort of software if you're going to make these really in depth calculations, even something as simple as that Roth conversion, because while you might be looking at the marginal tax rate, you also want to be considering other credits or taxation of social security, for example, that's going to be impacted to paraphrase Mike, you don't want to be using a spreadsheet, you want to be using software to make these calculations. This question is from username nobody from the booklets forums, who asks, how are other DIYers modeling their portfolio with regard to tax rates in the future? Is everyone planning for tax rates to revert in 2026? That is the sunsetting of the tax cut and job act tax holiday that we're currently enjoying. If there isn't any new legislation passed, we're going to be looking at how your taxes come 2026. Yeah, this was a popular request in our software. We actually built this. If you go into our software and go into my plan assumptions, you can go down to taxes and toggle use current tax rates or change to 2017 tax rates. See how your plan works in those different scenarios? That's the kind of thing we hear from our users and we will add to the platform. And another big thing that we're doing is just building scenarios. I have a scenario in our retired 55 versus 60. What does that mean? Be able to quickly move between these things and create and delete them has been a super popular thing. This question is from want to retire early, who gives us lots of great questions. They write, at what point should we stop DIYing at a certain portfolio amount, age or life phase, et cetera? I think this is a personal decision per the earlier comments. I would say over time, getting more people involved, more trusted people involved in your money, just as a hedging thing is probably a good idea. And even along the way, having external checkpoints, we all have our own biases and beliefs about what we're doing and why we're doing it. It's Morgan Housel talked about this, the value of a financial advisor is just that they're not you. It's somebody else looking at your money objectively. You don't have the emotional tie-ins and hangups that come with it and they can maybe encourage you to take action and get you to realize that not taking action is an action and that might have a real penalty. So I think that if you're completely DIY, talk to somebody else. It doesn't have to be a long-term thing. It can be a one-off thing, but just get a fiduciary expert to take a look at your situation and then probably, on a regular basis, doing that and if you're having big events doing it and as you get older, making sure you're set up appropriately and the right people have the right access so that you can avoid getting taken advantage of. Our last question comes from username cool as a dog from the bogus forums who writes, your software uses the midpoint as the tool for the expected simulation. Perhaps you can share with us how to understand the output. There's an assumptions button in the upright hand corner of our software that says what I want to choose for both inflation and returns, optimistic, average or pessimistic. The higher the pessimistic and optimistic numbers, the higher the risk and the higher the volatility, which we use to drive the Monte Carlo modeling that's happening under the covers and we do default to the median. We let you pick different ways to model this so you can model your plan in an optimistic situation and a pessimistic situation as well. So the default is average, but if you click it up, it's going to recast your entire plan and as you dial up risk, your expected returns will go higher, but your volatility will go higher too. We have a Monte Carlo Explorer where you can come in and vary investment returns, vary inflation to very medical inflation and very wage growth. So you can add in additional volatility to your entire plan. Let me ask you another geeky Monte Carlo simulation question. This is something we discussed in a previous episode. That when it comes to targeting a success rate, what's the maximum worth even targeting? You want to look for 80, 85% success rate for what you're doing. I do think, like what we talked about earlier, it would be better for us to present this in the form of guardrails and what that actually means in terms of what the lifestyle change would be for you and it would help a lot of people sleep better at night. So that is something we're looking at for sure. And I think you'll see in our software and then understand, hey, if you're way under, if you're under 30%, then you're going to have to be pretty thoughtful about working longer, claiming social security better, thinking about your expenses in a big way. That's going to be a big part of your plan. One thing that I've learned from understanding how Monte Carlo simulations work is that there isn't mean reversion in Monte Carlo simulations and mean reversion just means that if it goes up, it's going to go down and vice versa. This is what we've seen with the stock market historically. Any market crashes are met with a recovery and every recovery is followed by a market crash, but you don't necessarily always get that in a Monte Carlo simulation because it can be random. So in a Monte Carlo simulation, you can have several simulations where the market goes down and down and down, and that's not realistic. And it's those extreme events that perhaps we can ignore that say you mentioned an 80, 85% success rate is all you want to be considering because those really high success rates such as 99% are looking at things that probably won't happen anyway, assuming that the global economy doesn't collapse. What are your thoughts on that, Steve? With Monte Carlo, we run like a thousand simulations, so you're running lots of paths. And some of them are going to have bad outcomes, but generally, the idea is that it'll give you a sense for how the market could behave. Steve, thanks so much for joining us today. Any final thoughts before I let you go? I really appreciate the opportunity to be here. It really is an honor. I'm a big fan of Boglehead's Vanguard, Jack Bogle, what he did for the industry. He single-handedly changed the outcomes for millions and millions of individual investors, and he's changed the whole industry by bringing fees down and bringing more efficiency and transparency. So it is awesome to be out here. We appreciate the community and everything we've learned with Boglehead's members and anyone who signs up, we appreciate the support. If you're free or paid, all feedback is welcome. Feel free to message me ideas about how we can do better. And Steve, I know you mentioned you're planning on attending the conference this year. So folks, if you want to give Steve your feedback in person, make sure to register for the 2023 Boglehead's conference. That's Boglecenter.net slash 2023 conference. There might still be a few tickets left. Steve, thanks again for joining us on the show today. Thanks for having me, John. I really appreciate it. And that wraps up our interview with Steve Chen. It also wraps up me guest hosting the Boglehead's On Investing podcast. Next month, your normal host Rick Fieri will be returning. With me having completed my duties as guest host for the Boglehead's On Investing podcast, I'll be returning to our Boglehead's Live series. That is where the Do-It-Yourself Investor community asks their questions to financial experts live on Twitter. For folks that can't make the live events, episodes are recorded and turned into a podcast. You can find Boglehead's Live On All podcast platforms. Our next live episode is scheduled for Tuesday, October 24 at 11 a.m. Pacific, 2 p.m. Eastern. Our guest will be Wes Krill, Senior Investment Director and Vice President and Dimensional Fund Advisors. So if you want to ask your questions to Wes live on Twitter, make sure to show up for our next Boglehead's Live show. And if you can't make the Live show, I'll be taking questions on the Boglehead's Forum, Boglehead's Reddit, Boglehead's Facebook, Boglehead's Twitter, and the John C. Boglecenter for Financial Literacy on LinkedIn. You can find links to join our live Twitter show at twitter.com slash Boglehead's or on any of those platforms I just mentioned, I'll also be posting that same link. And don't forget that this episode, as with all episodes, is brought to you by the John C. Boglecenter for Financial Literacy, a 501C3 nonprofit organization. You can make a tax-deductible donation at Boglecenter.net slash donate to support the mission of improving financial literacy. And as always, check out a wealth of information for do-it-yourself investors at the John C. Boglecenter for Financial Literacy at Boglecenter.net. And in all those venues I just listed, including the Boglehead's Wiki, Boglehead's YouTube, and local and virtual chapters. And a thank you for all the folks who helped make this show possible, including Nathan Garza, our podcast editor, Jeremy Zuck, our podcast transcriber, Barry Barnett for helping with the website, and Lady Geek for posting to YouTube. I couldn't do it without everyone's help. And finally, don't forget to rate and subscribe to the Boglehead's On Investing Podcast and Boglehead's Live on your favorite podcast platform. Thank you for checking out my final episode as guest host on the Boglehead's On Investing Podcast. I look forward to seeing you at the 2023 Boglehead's conference and on our ongoing live Twitter series, Boglehead's Live.