Monte Carlo Question - Why is living standard in first few years below Specificed Mean Real Return Living Standard?

Submitted by fundaddy22 on Sat, 10/24/2015 - 14:56

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For a Monte Carlo report, in the % Distribution Of Living Standard Report, why is the Living Standard for ALL percentiles below the Living Standard that is labeled, "Specified Mean Real Return" Living Standard?

This means that in the beginning years, 95% of the lives are performing below the Specified Return Living Standard. It doesn't make sense to me that 95 out of 100 lives do so badly early on.

Thanks for your help.

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dan royer's picture

dan royer

Sun, 10/25/2015 - 11:08

There's some unresolved

There's some unresolved issues with the Monte Carlo that appear when the model has some borrowing constraint. This may be what you are seeing. The software is unable to converge on the correct numbers in those early years. The developers are working on this one.

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