I'm hoping this is something simple I am overlooking. With the profile I have setup I just noticed something I can't explain. I can run an analysis with just Economic-Based Planning. I then activate the Monte Carlo option, with no other changes, and run another analysis. The Suggested Consumption Table is noticeably different between these two runs. The Current and Suggested Consumptions are lower by about 10% for the Monte Carlo active run. The Suggested Savings is lower by about 10% as well. I was expecting these to be identical between runs. I am missing something here?
After reading through the release notes in 2.36 and 2.37 and looking at my Monte Carlo reports after recently installing 2.37.2 I have the following questions I hope you can answer:
1. Looks like the Distribution and Range reports were eliminated as they do not appear on a report run and the User manual no longer describes them. The release notes say reports were simplified, but not eliminated. Why were they eliminated?
Why are annual discretionary spending recommendations so much lower than the average standard of living forecast from the monte carlo simulations?
For example, from the same report. Monte Carlo set with spend cautiously. All assets invested in Vanguard LifeStrategy Growth Fund (80% equities, 20% bonds)
- Annual discretionary spending recommendation (for all years): $102,187
- Monte Carlo result, Low Trajectory Average Standard of Living: $130,054
- Monte Carlo result, Median Trajectory Average Standard of Living: $160,998
My Standard of Living results have previously made sense, or at least I didn't notice that they didn't.
The recent Monte Carlo change has my standard of living often better with a Very Low Return vs. a Low Return. Every now and then, a High Return has a better standard of living than a Very High Return. I do have a significant bond allocation, if that matters.
It makes it difficult to root for an outcome :-)
I've specified conservative spending in my Monte Carlo setup. Everything looks fine in the non-MC report. Everything seemingly looks great in the MC report - all graphs go from something fairly horizontal at the Specified Mean Real Return to sloping dramatically upward for the 95th percentile. EXCEPT for the MC reports regarding Regular Assets.
What does the Living Standard values in the monte carlo analysis represent, compared to the baseline reports? Specifically, two questions:
1) do they represent all spending or just discretionary spending?
2) do they represent 'per adult' or 'total household' living standard?
I don't understand what this Monte Carlo report is trying to tell me. It has columns that go all the way to 200%. Not sure how there can be a 200% probability of anything.
Every time I run the monte carlo simulation I get different results - I assume this is expected since the random numbers used to generate the results are different on each run. However I find the differences are significant enough that I cant rely on the results for future retirement planning. After 20 years one run generates a 50th percentile living standard of 114K per year, a second rerun of the same inputs generates a 50th percentile living standard of 122K per year. I can imagine that this is not a bug, but is just the way monte carlo simulations work.
Are there any plans to add more asset classes to the "build portfolios" portion of the Monte Carlo planning method? For those of us who do not have access to Dimensional Funds, the options are very limited. I'd like to have access to historical data for Large Cap Value, Large Cap Core, Large Cap Growth, Mid Cap Value, Mid Cap Core, Mid Cap Growth, Small Cap Value, Small Cap Core, Small Cap Growth. I'd also like to see separate options for short, intermediate, long term bond funds in both the government and corporate sectors. Thanks!
Is there any information on setting up and using the ESPlanner Monti Carlo features. I'm looking for ESPlanner specifics.