Are balances as of 1/1 or 12/31?


I could've sworn I knew the answer, but can't find it documented to confirm.

Are balances --- e.g. Net Worth report for 2015 -- reflecting the value as of 01/01/2015 or 12/31/2015?



dan royer's picture

The balances in the reports reflect the end of the year.

Good timing Dan :)

Your inputs are for January 1st and the report outputs are for December 31st.


Thanks, Dan and Brian!

And do the investment earnings assume recommended withdrawals occur on 1/1 or 12/31?

Hi Chris,

I just ran a test for tax-sheltered assets and it works out perfectly for 12/31. Same with regular assets.


Hmm... Most people need to spend some money during the year to eat and pay other costs of living. I wonder if one could effectively force the recommended withdrawal to the beginning of the year with a one-time special expense, by adding a withdrawal in an amount that (by trial and error) equals the recommended amount.

My goal would be to sequester the money I plan to spend that year in a money-market or other very stable value fund, for use during the year. My annual withdrawals from regular and retirement savings would go into that account at the end of the year, to fund the coming year. The one-time special withdrawal would be seed money.

Does that make sense?

Hi Chris,

I think you're probably well within the effective margin of error given the uncertainty of future events (e.g. annual variations in RoR, inflation, taxes, actual withdrawals, etc.). To test how much the difference is between Jan. 1 and Dec. 31 withdrawals, I created a simple model:

- $100K starting assets (year 1)
- 2.913% real rate of return (6% nominal return and 3% inflation)
- Withdraw 4% of each year's assets annually
- Compare year end asset levels for Jan. 1 and Dec. 31 withdrawals

For a single year, the delta was ~0.12%. After 10 years, Dec. withdrawals had ~$1,050 more in assets or ~1.2% higher than Jan. withdrawals. After 20 years, this was ~$1,872 or 2.3% higher. After 30 years, this was ~$2,503 or ~3.5% higher. If you started with $200K in assets (double the model), the percentages would be the same and the dollar amounts two times higher.

If you took mid-year withdrawals or spread throughout the year, the delta would be less. Perhaps half these amounts as a first approximation.

It seems likely that portfolio annual investment expenses would be larger than these amounts in most cases. If you wanted to create a special expenditure that covered both the delta above and annual investment expenses, that could be worthwhile. However, the extra profile complexity and effort probably won't be much more accurate over the long-term given the many uncertainties we face. If it bothers you, mostly for peace of mind, you could include this in your profile.

Specifically for your next year's withdrawals, if you are trying to get a "nearly" exact value, you could estimate your total withdrawals including RMDs, investment expenses, multiple withdrawals throughout the year, etc. The output of this could be your seed money and you would only have to do this one year at a time, instead of through your end of life.


Thanks for your efforts, Brian. The effect being that small, I agree it's within the margin of error. I won't obsess about it.

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