Retirement isn’t what it used to be. No one knew it at the time, but the 1980s were the Golden Age of Retirement. Pensions were generous back then. Whether you invested in stocks or bonds, the proverbial wind was at your back. Both provided handsome annual returns.

Many retirees found themselves with more money, and a higher standard of living, than they had enjoyed while working.  Who knew? No one had a clue about how good things were.

Today, things are different. Better computer tools are available, for one thing. Databases that once cost thousands to access are now virtually free. Using them, researchers are making a dark discovery about the future. Retirement will be more difficult in the next thirty years than in the last thirty years.

How can this be? Simple. The returns on stocks and bonds are expected to be lower in the future than they have been in the past. This expectation of lower returns doesn’t come from a worrywart oracle. It comes from simple arithmetic.

In the past, stocks provided a good deal of their return as dividends. Many provided a yield of 4 percent. And the long-term average yield has been about 3 percent. Today, stock yields are lower than 2 percent. The same happened to bonds. While you could typically rely on U.S. Treasuries to yield about 5 percent in the past, the current yield on a 10-year Treasury is a bit over 2 percent.

Those two factors suggest that a typical balanced portfolio— 60 percent stocks, 40 percent bonds— which could be expected to provide an 8 percent annualized return in the long-term past— might now be expected to provide a return of 6 percent.

The reduction in return guts the long-term survival odds of the portfolio. It increases the chance that many retirees will die broke. The loss of return reduces the 30-year portfolio survival rate from 94 percent to only 77 percent.

Unfortunately, even this projection may be on the sunny side. Beyond accounting for reduced starting yields, some analysts are suggesting that both stocks and bonds are priced very high today. Reader mail indicates many agree. Reversion to the mean says that future valuation levels will be lower. Another dour suggestion: long-term corporate growth will be lower in the future.

Keep on this way and it isn’t surprising that some analysts expect really dismal future returns. Each reduction in assumed return reduces the odds your portfolio will last longer than you do.

If you’d like to see this for yourself, I’ve got a website for you to visit. It’s called “portfoliovisualizer” ( www.portfoliovisualizer). The product of Finnish computer scientist Tuomo Lampinen, his free online calculator does “what-if” portfolio calculations at eye-blink speeds.

With it, you can back-test portfolios, do simulations, do factor analysis, find asset correlations and develop efficient frontiers, not to mention test market timing models.

When I met with Tuomo at Jack Allen’s in Austin, he was direct, but a little sheepish. He said he didn’t yet know how he would make the site a profitable enterprise, but he was having fun doing the development work. He likes the “build it and they will come” model. So for the moment, these tools are free. Curious financial planners will love them.

I can’t tell you how he will be rewarded for his effort. But I think he will be.  And I can confidently say that a lot of expensive on-your-desktop investment software is doomed.

But enough of the nerd stuff.

You can see what lower future returns will do to retirements by using the Monte Carlo analysis tools on his site— just use “parameterized returns” and see what happens to portfolio survival as you lower assumed returns. Watch the graphic display of asset levels arc down and crash before year 30.

Take annualized returns down to 4 percent (still a 2 percent real return in a period of 2 percent inflation) and the odds of portfolio survival for 30 years drop to 50 percent. Take the annualized return down to 2 percent— meaning a zero percent real return— and survival odds drop to 21 percent.

It’s not a pretty picture. Keep your day job.