The New Buzz in Planning: You Can Save Money, and Make Smarter Decisions, by Keeping Your Options Open

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If I said that life was uncertain, you'd nod. If I added that it's smart to keep your options open, you'd nod again. But when you make money decisions, you often forget these simple truths. You're out on a limb, and unprepared for things to change. I'm not talking just stocks, I'm talking taxes, debt, insurance, everything.

The buzz, in personal-finance circles, is uncertainty planning. The leading practitioners are advancing two terrific ideas.

The first one is "probability." This refers to the odds that your money choices will get you where you want to go.

You deal with probability every day in the weather reports. When the radio says there's a 70 percent chance of rain, you take an umbrella to work. That same idea is being carried over to personal finance. What is the chance that your current savings and investments will yield the retirement income you want?

For a plausible answer, …