Living longer decreases probability of success?

[Racer X]

When I enter parameters for 53 years, I get a higher percentage of success than when I enter the same parameters - all other factors the same - for 43 years.

Is this just a factor of having more scenarios available? It seems a bit odd.

 

[aim-high]

Actually it's a factor of having fewer scenarios available. 53 years removes scenarios from 1962 onward. 43 years only removes scenarios from 1972 onward.

 

[REWahoo]

Actually it's a factor of having fewer scenarios available. 53 years removes scenarios from 1962 onward. 43 years only removes scenarios from 1972 onward.

+1

And the worst sequence for retirement (so far ) began in the year 1965.

 

[Racer X]

Ah, got it, thanks. I think I also screwed it up by trying to be too cute.

I was running some absurdly conservative scenarios for DW. I was showing that we still had a great prediction of success even if we decided to buy a very expensive house in 5-10 years time. Because we'll be retired with no documented source of income, I'll assume we're paying cash, and took a large chunk out on the spending tab. (In real life, we'd never do this, but I was trying to prove a point to DW...)

By shortening our life spans 10 years, I think I reduced the number of years to remake that money spent on the hypothetical house, as otherwise annual spending should be far less than returns. It didn't affect it greatly - I think it went from 90% to 87% when we died at 90 instead of 100, but it was curious.

Anyway, that all makes sense now. Thanks.

 

[bingybear]

try a monte carlo simulation... not being based on a back test with fixed cases may be more realistic statistically.

 

[Rick_Head]

Or just realize that 53 years is too long a time frame to be meaningful. Google "retirement calculator from hell" and make your own plans.