rate of return

Real rate of return change has little impact on discretionary spending?

I must be doing something wrong - I've experimented with different nominal rates of return on regular and retirement assets, and changed inflation assumptions as well, in order to test the impact of changes in real rates of return on discretionary spending and end-of-life net worth, yet discretionary spending actually goes down when real rate of return goes up, and overall, there is very little change regardless of the real rate of return. Assume I'm missing something obvious?

Does a future change in the inflation rate reduce real returns going forward?


Since returns for regular assets and retirement accounts are set using nominal rates, does adjusting the inflation rate in a future year reduce the real returns going forward?

If that's the case, then if one adjusts the inflation rate at a future year, one should also adjust the nominal rates of return for those accounts at that same future year. This nuance didn't occur to me until recently.

Mean Returns in Monte Carlo Build Portfolios tab stale ?


I am running 2.28.0. When building a new portfolio in the Build Portfolios tab of Monte Carlo screen, I added Large Cap Stocks as one of the assets. The mean return column showed 8.90%. But on an older portfolio with Large Cap Stocks that I built a couple years ago the mean return column showed 8.70%. On the older portfolio, when I delete and re-add Large Cap Stocks, the mean return is 8.90 %.

Questions on Monte Carlo, Inputs and Assumptions report

I have a couple of specific questions about the "Monte Carlo Spending Behavior & Portfolio Characteristics" section of the PDF Reports under "Inputs and Assumptions" that I hope you can answer.

There is a heading called "Choice of Discretionary Spending Behavior: XXXX". In mine XXXX says Cautious because that's the spending behavior I chose. Under this heading it shows each Monte Carlo Portfolio with a set of columns. One of the columns is "Mean Real Rate of Return".

Investment Rates of Return

What are other ESPlanner users assuming for investment rates of return, annually, over the next 20-30 years?

This factor seems critical, at least in our case. So I'm very interested to hear what you're using. Many financial analysts today are saying that "it's a whole new ball game" (for a variety of reasons), i.e. you can no longer look at historic stock market returns, for example, to predict what we can earn from now on. Even 6% seems a bit optimistic given this new attitude.

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