Best way to track my portfolio vs projection

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borisvar
Posts: 2
Joined: Mon Jun 07, 2021 5:23 pm

Best way to track my portfolio vs projection

Post by borisvar »

I have a feeling this question comes up not the first time.

I have created a model, made all adjustments and run enough variety of simulations to be relatively confident.
Now I have retired. What is a suggested procedure to track if my actual portfolio goes along with my original calculations?
If I only save my today's results as a "base" and would try to compare them to actual numbers in, let say, 3-4 years, then inflation will play its tricks and will make apples-to-apples comparison not trivial, will it not? :roll:

Suggestions?
jimr
Posts: 725
Joined: Thu Feb 28, 2008 6:48 pm

Re: Best way to track my portfolio vs projection

Post by jimr »

As you mentioned, inflation makes it hard to track amounts across runs of the planner that are several years apart.

You could use a spreadsheet that automatically adjusts amounts for inflation across the years.The columns could have years and each row could be an amount you'd like to track across planner runs like ending portfolio value, withdrawal amount, etc. But really that sounds tedious and it's not clear how much help it would offer with forward-looking decision making.

My own approach when I use the planner is to just assume I'm retiring in the current year and play around with various scenarios to see how robust my plan is based on current input values.

Separately, I update a spreadsheet at the end of each year that has years as columns and things like portfolio value, income, spending, net withdrawal amount, and withdrawal rate to track historical results/performance. Amounts in this spreadsheet are all in nominal dollars, but that works ok for my purposes. The spreadsheet gives me a rough sanity check on how things are going at a high level w.r.t. portfolio value and withdrawal rate.
borisvar
Posts: 2
Joined: Mon Jun 07, 2021 5:23 pm

Re: Best way to track my portfolio vs projection

Post by borisvar »

Makes sense to me. Thank you, Jim.
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