Can I model a decreased exposure to stocks as I age?

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frp user
Posts: 65
Joined: Fri Feb 29, 2008 12:55 pm

Can I model a decreased exposure to stocks as I age?

Post by frp user »

To Whom It May Concern:

First off, I have found this to be a very valuable planning tool. Thanks...

Given the popularity of decreasing your exposure to stocks as you go older, how would you recommend incorporating this into the model? Unless I set up a large number of Portfolio Returns by year, I see no way to do this.

Again, thanks for a wonderful product.
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admin
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Re: Can I model a decreased exposure to stocks as I age?

Post by admin »

Thanks for writing about the flexibleRetirementPlanner. I'm glad you've found the tool useful.

You are correct that there's no automated way to have the planner lower the portfolio's return and risk as time goes on. However, I think you could accomplish something similar using the additional inputs of the planner.

The best way to do this would be to break the retirement plan into 3 or 4 periods (each 5-10 years long) and specify a different portfolio return/risk for each of these periods. (see attachment).

Please let me know if I understood your question and if this is a workable solution.

Regards,

Jim
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frp user
Posts: 65
Joined: Fri Feb 29, 2008 12:55 pm

Re: Can I model a decreased exposure to stocks as I age?

Post by frp user »

This seems to be working well...

I do have a question about the Additional Input "Misc. Income". Can this be used to simulate working for the first X years of retirement? As far as I can tell, the one on the main page assumes work from a starting date to the end of the plan.

Thanks!
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admin
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Re: Can I model a decreased exposure to stocks as I age?

Post by admin »

frp user wrote:I do have a question about the Additional Input "Misc. Income". Can this be used to simulate working for the first X years of retirement?
Yes it can. You can use it for any type of retirement income. Just be sure to correctly select whether it should be cola'd or not
As far as I can tell, the one on the main page assumes work from a starting date to the end of the plan.
That's correct
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