No, the models I know best are the ones I typically link (e.g., PortfolioVisualizer, FiCalc, TPAW, FireCalc). I'm aware of Boldin and Pralana, but never played with either of those.Wondering if you are familiar with Flexible Retirement Planner?
I think these are useful metrics when one is considering an amortization type strategy like constant-percentage (const-%) or variable-percentage (VPW), rather than the constant-dollar (const-$) strategy used in the Trinity Study. The appeal of using const-$ is that you always have an ever-increasing withdrawal from year to year, but the drawback is a non-zero chance of running out of funds early. The appeal of const-% and VPW is that you can NOT run out early, but the drawback is that you can suffer "pay cuts". So knowing how often and how big will those pay cuts likely be seem like useful metrics.One thing I particularly like is that it allows you to implement a Spending Adjustment based (with constraints) based on the generated return.
This provides some additional probabilities that I find useful (although it could be just my perception):
Probability of:
- Needing a spending adjustment
- Magnitude of adjustment
- Median Timing of the adjustment
... am curious about your take on using these metrics.
In my Withdrawal Monte Carlo, I've provided "averages" of for the % yearly increase and the number of pay cuts over the N-year period (only applicable for const-% and var-%), but averages don't show worst case, which is probably more of concern to people considering such strategies. I know TPAW does something like VPW but with "guard-rails" so it's not fully const-$ nor is it fully VPW, but it adjusts to market conditions like VPW, but tries to dampen those adjustments (both smaller pay cuts and small pay raises, so to speak). I still need to play with TPAW more to better understand what it's doing, but I have complete faith in Ben's work (which as mentioned somewhere is peer-reviewed by at least two finance professors).
I think if you have other income streams (e.g., pension + SocSec) that cover a large majority of your mandatory expenses, then there's not much reason to worry over using VPW since your portfolio draw should be only a minor portion of your mandatory expenses and taking pay cuts on discretionary spending seems fine (not pleasant but not going to run out early!).
Statistics: Posted by bonesly — Tue Jan 28, 2025 5:05 pm