Reply To: How to use AI to create retirement projections that include side income (beginner-friendly)

Good point — calling out side income up front is smart because it behaves differently from pensions or investments (it can stop, grow, or be seasonal). Below I walk you through a simple, beginner-friendly way to use AI plus a spreadsheet to build retirement projections that treat side income realistically.

One simple concept (plain English): treat side income as a separate stream you can vary. Instead of assuming a single fixed number, give the projection a few possible paths — for example: steady, growing, and interrupted. That gives you a range of outcomes so you don’t get a false sense of precision.

1. What you’ll need
   • Basic details: current savings, expected retirement age, expected withdrawals, pensions/Social Security estimates.
   • Side income info: current annual amount, how regular it is, how likely it is to continue, a reasonable growth or decline rate, and any tax or cost considerations.
   • A spreadsheet (Excel, Google Sheets) and access to an AI helper (chat-based tool) to clarify assumptions and build formulas.
2. How to set it up (step-by-step)
   1. Create year-by-year rows from now until age 95 (or whatever horizon you choose).
   2. Columns: starting balance, investment return assumption, contributions, side income, withdrawals, ending balance.
   3. Model side income as one of three scenarios: conservative (lower or stops), base (continues with small growth), and optimistic (grows or scales up). Put these as separate columns or separate sheets.
   4. Use a simple formula each year: ending balance = starting balance * (1 + return) + contributions + side income – withdrawals.
   5. Ask your AI helper to translate your narrative assumptions into spreadsheet formulas, to create sensitivity tables, or to generate plain-English summaries of each scenario.
3. What to expect
   • A range of outcomes rather than a single number; the gap between scenarios shows how important the side income is to your plan.
   • Identification of breakpoints — years or withdrawal levels where the plan gets tight if side income drops.
   • Simple sensitivity insights like “if side income falls 25%, you’ll need X in savings or Y in spending cuts to stay comfortable.”
4. Practical tips and next steps
   1. Validate assumptions annually: update actual side income and refine the growth/continuation probability.
   2. Stress-test non‑recurring risks: what happens if side income stops for two years? Run that scenario.
   3. If helpful, ask AI to produce a one-page narrative summary you can share with a financial advisor for a sanity check.

Keeping things simple, transparent, and scenario-based builds confidence. With a spreadsheet and a little help from AI to speed up calculations and explain tradeoffs, you’ll have clear projections that show how much your side income really matters — and what to do if it changes.