Retirement Spending Analysis
This analysis is provided courtesy of Heather Christmann
Regal Financial Group
2687 44th Street SE
Kentwood, MI 49512
Your Basic Data
Years in Retirement :
Current Retirement Nest Egg Value :
Initial Withdrawal Amount :
Annual Cost of Living Adjustment
Planned Increases/Decreases to withdrawal amount beyond inflation adjustments:
Your Retirement Portfolio Details
Broad Asset Allocation
Detailed Stock Allocation
Expected rate of return on bonds:
Expected rate of return on cash
Total expected investment expenses:
RETIREMENT ACCUMULATION STRATEGY
SPENDING ANALYSIS RESULTS SUMMARY
How to Use Nest Egg Guru's Retirement Spending Calculator
Instead of focusing on a single probability of success (as most Monte Carlo simulation calculators do), Nest Egg Guru believes it is more instructive to present users with a full range of simulation results representing a broad spectrum of potential economic conditions. In keeping with the basic financial planning philosophy of “hope for the best, but prepare for the worst” users are encouraged to evaluate their preparedness by focusing on the bottom half of the simulation results (median-worst). In particular, the 1%, 5%, and 10% results may be considered the most valuable statistics for assessing the risk of each illustrated input scenario.
Presenting the remaining balance data in five year increments over the illustrated retirement time horizon is intended to enable users to quantify their risk of running out of money in a way that a single probability percentage cannot. Similarly, the inclusion of remaining balance data may allow users to tangibly quantify and balance the tradeoff between their planned annual withdrawal amount and the remaining balance that may be left for heirs. This is an important concept because it helps users see and understand how focusing too much on establishing a “safe withdrawal rate” (i.e., an inflation-adjusted withdrawal rate that will assure sustainability) may lead to a lower standard of living in retirement and too much money left on the table for heirs.
Users are especially encouraged to explore how changing different input values may impact their results.
Based upon the personal data you entered and the withdrawal elections you made, Nest Egg Guru ran 5,000 simulations using randomly sampled historical monthly index return data in percentages that match your specified retirement allocation. The results from these simulations are summarized as follows:
Out of 5,000 withdrawal simulations, your year withdrawal goal was successful this % of the time:
This is the percentage of simulations in which your Nest Egg lasted longer than you did.
At the top 20% result (80th percentile) of the 5,000 simulations, your remaining portfolio balance at the end of years was:
Out of 5,000 simulations, your retirement nest egg was depleted before years this percent of the time:
This percentage represents the failure rate of the 5,000 simulations.
At the worst result out of the 5,000 simulations, your remaining portfolio balance at the end of years was:
Complete Retirement Nest Egg Sustainability
The complete range of simulated remaining balances is presented below in five year increments
for your 30 year estimated retirement horizon. These detailed results are
intended to help you quantify your risk of running out of money in retirement.
All users are encouraged to experiment with the calculator to see how changing the various
inputs may impact the results.
The complete range of simulated remaining balances is presented below in five year increments for your 30 year estimated retirement horizon. These detailed results are intended to help you quantify your risk of running out of money in retirement.
All users are encouraged to experiment with the calculator to see how changing the various inputs may impact the results.