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Re: Set a Minimum Balance for Taxable Savings?

Posted: Mon Sep 03, 2018 10:30 am
by mountainsoft
Do you have assets in your tax deferred and tax free portfolios in addition to the taxable portfolio?
I don't have a tax free portfolio, but I do have tax deferred with $6480 added annually (traditional IRA). I specified a custom 6% return with 6% deviation on the main screen (lower than what I'm actually getting just to be safe). I occasionally try other returns too like 8% returns with 8% deviation just to see what effect it has, but a 6% return seems like a safe and reasonable value for estimations. I'd rather plan for the low side and be surprised on the high side. :)

Re: Set a Minimum Balance for Taxable Savings?

Posted: Mon Sep 03, 2018 1:07 pm
by jimr
Got it. From what you've described you shouldn't see any unintended impacts from using the separate returns feature.

That said, after thinking about this some more I've decided to change the way the simulation works to tie the correlations of the separate portfolios to 1. This means that while the taxable, tax deferred, and tax free portfolios can still be given separate returns and standard deviations, they'll all move in lockstep relative to each other during each path through the simulation.

While this change may not be what some people desire, it's a more conservative approach and it'll keep folks who don't understand the nuance from unknowingly underestimating the volatility they're likely to see across their portfolios.

The version with this change is 04-02-15 and it can be downloaded here:

Re: Set a Minimum Balance for Taxable Savings?

Posted: Tue Sep 04, 2018 12:05 am
by mountainsoft
I don't understand the intricate details of the internal functions, but my results seem to be spot on with the previous version. So, I suppose that's a good thing. Thanks for the ongoing support! FRP is still the best retirement planning software I have used.