tag:blogger.com,1999:blog-4614944046348078075.post7303326468915265133..comments2023-05-15T11:34:08.402-04:00Comments on Second Career Search: Is Monte Carlo Analysis For Retirement A Winner?felixhttp://www.blogger.com/profile/05451100604086376296noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4614944046348078075.post-26660302780767493352022-12-27T03:47:10.425-05:002022-12-27T03:47:10.425-05:00I loved your blog post about how to find a second ...I loved your blog post about how to find a second career. I feel like you did a great job of explaining your process and I also appreciate that you mentioned Monte Carlo analysis. It's always so hard to get that one piece of information, so it was great that you included it as well!<br /><a href="https://canadiantaxrefunds.ca/how-to-check-tax-calculator/" rel="nofollow">how to check tax calculator</a>Canadian Tax Refundshttps://www.blogger.com/profile/04021161692318560574noreply@blogger.comtag:blogger.com,1999:blog-4614944046348078075.post-33774321859385106792016-03-31T09:31:46.076-04:002016-03-31T09:31:46.076-04:00So few folks take the time to actually think throu... So few folks take the time to actually think through what is under the hood of retirement planning. Well done. Like you, I've used Vanguard's planner, plus Principal's, Personal Capital, Fidelity's, and Morgan Stanley's. All this after an old school hard drive crash tanking my large DIY spreadsheet model of lifetime networth forecasts. This class of models share a common flaw: they start with "how much do you need to spend in retirement?" Then move on to their simulations and forecasts. The right start question is: "given what I have saved plus SS, what is the maximum I can spend and not spend out before death?" That second question, not the first, is the right point of departure for all this type of thinking for folks who are at retirement age. Cheers. Dontayhttps://www.blogger.com/profile/17289990057777466657noreply@blogger.comtag:blogger.com,1999:blog-4614944046348078075.post-29560845557248236842016-03-05T09:35:42.073-05:002016-03-05T09:35:42.073-05:00Thanks for the well thought out comment. Vanguard...Thanks for the well thought out comment. Vanguard ran a scenario where I added a "longevity insurance" annuity. For about $50K, it increased my probability of success by about 1%. Hard to know if it is worth it.felixhttps://www.blogger.com/profile/05451100604086376296noreply@blogger.comtag:blogger.com,1999:blog-4614944046348078075.post-62909638353166140242016-03-04T13:39:52.050-05:002016-03-04T13:39:52.050-05:00If you take into account the likelihood of living ...If you take into account the likelihood of living to each birthday, you could create a plan that has an 85% chance of success but has only a 20% chance of providing income until you're 95. The problem with longevity risk is that we must follow a plan that is likely to leave money unspent just to take care of the case where you happen to live a long life.<br /><br />One alternative is to use some of your assets to buy an annuity to lay off some of the longevity risk, but today's low interest rates make this unattractive. A better alternative is to devise a plan where you adapt your spending if markets don't give the returns you expect. With such a plan, success or failure is defined by whether you're ever forced to reduce spending below say 80% of your starting spending level (adjusted for inflation).<br /><br />Unfortunately, most people who tinker with different types of plans tend to just pick the one that has them spending the most today. This is why even those who make a plan often end up running short of money.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.com