There are several ways to optimize things - Roth conversion (re-analyze to adopt), Social Security (no adopt button), withdrawal order (and adopt), decomposing consumption spending, etc.
Is there a particular preferred order to do these in? I always wonder if the order I do these in has some impact where it gets into a circular thing where optimizing one thing may cause me to need to re-optimize another to get things dialed in as best possible
Maybe a super "optimize all" button with a popup that shows the impact of each thing and an 'adopt' next to it to accept or not.
It would also be cool if the study sensitivities showed the impact in terms of success percentage, rather than dollars, since that's what folks tend to obsess over.
Notice how I like making more work for Stuart 🙂 Regardless, this is an awesome tool and there's only so much you can do!
For what it's worth, this was a question I too had early on - how changes made to one variable impact (positively or negatively) the other variables . I find myself alternating between scenarios and the tabular sheet view to see changes, but it requires a lot of focused concentration to keep track of things. An optimize all option is an interesting idea (but maybe unrealistic), but you'd have to have complete confidence in whats going on behind the numbers and generating the results to adopt it or not. An example I shared with Stuart: I'm earmarking a large portion of an IRA for charities (QCD's)...but then, how would PRC know that when determining optimal Roth conversions? When I run the optimize feature it can't know I'm going to give away, say, 75% of my IRA, so the portion it recommends converting and how to convert (time vs tax bracket) seems disconnected with that intent/plan. Not sure we solved the problem but it seems aligned with your question.
You're killing me, Bill 🙂
All of these optimizations are interdependent and I think it's probably not feasible to do a super-optimize, though I'll put that on the list for consideration at some point. Regarding the Study Sensitivities page and showing success rate rather than delta dollars, that's a big problem because it would require a Monte Carlo or historical analysis after every click (i.e., every tweak of an input parameter) to generate and analyze all the test cases to arrive at the answer. And each Monte Carlo and historical analysis takes several seconds each (the improved version of historical analysis that's coming out in the 2022 model actually takes about 10 seconds).
...and a button to order a coffee...
Ha, ok that makes good sense, Stuart. I'm psyched about the Roth and historical improvements.
Will you be adding the 2008 financial crisis at any point to the Bear Market Analysis? I know we could cook it up on our own with some research, but it is a recent and good comparative study. I'd hate to lose 1973 due to some unique characteristics there, and 2000 since it's recent. 1929 was a big deal and it's nice to say to clients "You would have even been able to retire right before the big crash of '29 and Great Depression! but due to lessons learned and new checks and balances it'd be hard to imagine something like that happening again.
It's also important for folks to remember though, that these measure market rates of return during those periods, not the associated problems of inflation, stagflation, etc.
@hines202 The 2008 financial crises is already in the historical data but the 2022 model will make it much easier to access for analysis.
