Maximizing Discretionary Spending over a Lifetime
I did a "maximize" on my base profile in Maxifi (I'm sure something similar would be the case in ESPlanner) and the net result was that it shifted a large amount of discretionary spending from pre-retirement to post-retirement. Much of it so late (80+ years old) that I wondered whether I'd actually be able to make use of it. It was more total discretionary spending over a lifetime, but spent much later in life, at a time when I might not be able to enjoy it or might not even be living.
It was unclear to me that that was "better". Which makes me wonder:
- How might you adjust for this sort of risk in doing planning and what if scenarios?
- How is Maxifi discounting discretionary spending/income/etc. from future back to present? Is it just using inflation as the discount rate, or is there something more sophisticated? What discount rate is it using and is it "risk-adjusted" in any way?