Interaction between Monte Carlo retirement portfolios and Retirement annuitization

What is the interaction, if any, between the retirement portfolios constructed using Monte Carlo planning and the option to annuitize in the Retirement section? I read the Monte Carlo analysis as effectively self-annuitization via smooth withdrawals if one leaves the percent of assets to be annuitized at 0% and 100% non-annuitized to be spent in the Retirement section.

But what happens if one chooses to annuitize all or part of those retirement accounts? Does one need to specify in the Monte Carlo section that those accounts are no longer held (i.e., blanked out) at the date one wishes to annutize and for the years beyond to give accurate results? Why is there only a stock/bond option for variable annuities when the Monte Carlo simulation permits percentage allocation across a wider range of assets? Given that many variable annuities are held in diversified portfolios this seems limiting. I reread the documentation but this remains opaque to me.


Hi, You should enter your retirement accounts even if they are to be annuitized. You should also indicate how they will be invested. We are, under the hood, simulating the return on the retirement accounts based on your portfolio allocations of them up to the point of the annuitization. After that point, the amount that is annuitized is assume to be invested in one of the two ways and we continue forward with the Monte Carlo by taking draws on the return to the annuity and adjusting the annuity level each year accordingly. If this isn't clear, call me at 617 834 2148.
best, Larry


Very good, thank you.

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