Future Politics is like the future market – no one knows what will happened. Therefore, I follow the Bogleheads® investment philosophy:

• save a lot,
• select an asset allocation containing both stock and bond asset classes,
• buy low cost, widely diversified funds,
• allocate funds tax-efficiently,
• and stick closely to a plan.

PRC helps us stick closely to a plan. It can always add more details, accuracy, optimizations and “What If” options but generally PRC is fine as it is.

@pizzaman There's a limited amount we can do given the unknowns. Authoritarianism has sometimes been good for the markets (short term) and sometimes bad. Chaos is in general bad. Incompetence is in general bad. Corruption is in general bad. Huge debt is in general bad.

• Insofar as the risk is focused on the USA, I can diversify more into global stocks and bonds. (Say 50% global instead of 30%).
• Insofar as huge debts increase chance of decreased ss and medicare, i can put aside more into those buckets from my discretionary bucket.
• Insofar as the market across the world is more risky, I can diversify more by working longer before retiring, laying low at work, and adding assets like gold.
• Insofar as there is risk of political chaos, I can explore moving.
• Insofar some of us might be deported to concentration camps abroad, I can work on an "escape plan" now.
• Insofar as inflation risk is higher now, I can up my purchase of TIPs.
• There might be types of hedging and insurance that might protect a bit against specific risks.

All of these come at a cost, a type of insurance without guaranteed results.

PRC includes many "knobs" we can adjust (eg inflation of various sorts, asset allocation, asset returns, working longer, cuts in ss) to explore these things. Ironically the expected returns of equities might go up since it will require higher returns for people to invest given the higher risk. For those of privilege able to stay steady through it all (have the means politically, psychologically, financially) they may end up with more money if the risk doesn't materialize.

Well, the whole point of PRC is to help determine what will happen to your retirement portfolio (plan) "In The Future". That's why it includes two forms of simulations and why people like Bill Hines recommends that you set your length of retirement to something close to 100 years old. So you need a reasonable idea of what might happen in the future or at least a range of possible outcomes so you can run your simulations, otherwise there is no point in using PRC in the first place. I think it's great that other threads are looking at ways to improve PRC such as talking about how the black box of Monte Carlo works or how safe return rates may be related to your expenses. But that's kind of nibbling around the edges. I guess my point for starting this thread is that we need to look at the biggest threats to your retirement success, and right now, in my option, it includes the impact of OBBB on federal debt, SS, Medicare, etc. going into the future. Maybe there is nothing more to add to PRC then what it already does (I would increase the % increase in taxes rates that are now limited), but to assume that Congress will fix things in the near future so we don't have to worry about it is taking on a BIG risk, one that I am not willing to take on. @jkandell has some very good ideas on how to start to address these likely problems, but I think more needs to be done and PRC may help. How, I not sure, but I will continue to think about it.

With that in mind, the 2025 Social Security and Medicare Trustees' report came out with the following summery:

Executive Summary

• The Social Security and Medicare Trustees today released their annual reports on the financial status of the nation’s two largest entitlement programs; the reports reiterate a past conclusion: Social Security and Medicare are approaching insolvency.
• The Medicare Trustees estimate the Medicare Hospital Insurance (Part A) trust fund will be insolvent by 2033, at which point Medicare Part A benefit spending will be slashed by 11 percent.
• The Social Security Trustees estimate the Social Security Old-Age and Survivors Insurance trust fund will deplete its reserves by 2033 and the Social Security Disability Insurance trust fund will remain solvent at least through 2099; the theoretically combined Social Security trust funds will be insolvent by 2034, at which point all beneficiaries regardless of age, income, or need will face a 19 percent benefit cut.
• These projections show that both Social Security and Medicare are on the verge of bankruptcy and highlight the need for policymakers to enact trust fund solutions sooner rather than later to prevent across-the-board benefit and spending cuts.

Continuing with the Medicare status quo is unsustainable. Balancing Medicare’s annual cash shortfalls under the existing system would prove devastating to seniors and failing to reform the status quo would result in the following:

Sources: Centers for Medicare and Medicaid Services and authors’ calculations.

https://www.americanactionforum.org/insight/highlights-of-the-2025-social-security-and-medicare-trustees-reports/

About 25% of the cost of Medicate Part B comes from premiums, the other 75% (by law) has to come from the US general fund. That is one of the biggest parts of the US Debt, and will only get worse.

It is unlikely that any of this will be addressed by the federal government in the next 4 years. Even if Democrats retake Congress in 2 years, Trump will maintain his veto power. So that puts us into 2029, just 4 years before SS payouts drop. That gives me great pause!

Posted by: @pizzaman

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Bill Hines recommends that you set your length of retirement to something close to 100 years old. So you need a reasonable idea of what might happen in the future or at least a range of possible outcomes so you can run your simulations

I hope this is the right thread to post this, but one of my essential sites is https://www.longevityillustrator.org/ . You list your age, smoking, health; then using formulas from the Society of Actuaries of America Research Institute and the American Academy of Actuaries, it calculates your longevity in useful ways.

The tables I use with regard to Pralana are the 10% and 25% chance that either of myself or wife will be alive; and the 10% and 25% and 50% chance that both my wife and I will be alive. The former becomes the end year of my plan. I plan for the 25% chance one of us will be living in Pralana as end year of my Pralana plan; and think of the 10% chance as an outer limit for possible annuity if needed. It is definitely closer to Hines's 100 years than it is 70 years! (If you put in excellent health for both of you the results become more daunting than you'd think.) The second figure, when the chances are high that both of us will be alive, is more of a secondary figure, allowing me to have a rough sense of when we might be doing things together, and when joint activities are not very reasonable to plan. These tables are also useful to calculate when your social security as a couple might go down to one survivor (e.g. 75th percentile of longevity for the oldest person).

I run these every years, because the longer you live the higher the chance you'll live even longer.

Posted by: @pizzaman

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I guess my point for starting this thread is that we need to look at the biggest threats to your retirement success, and right now, in my option, it includes the impact of OBBB on federal debt, SS, Medicare, etc. going into the future. Maybe there is nothing more to add to PRC then what it already does (I would increase the % increase in taxes rates that are now limited), but to assume that Congress will fix things in the near future so we don't have to worry about it is taking on a BIG risk, one that I am not willing to take on.US Debt, and will only get worse. ...

It is unlikely that any of this will be addressed by the federal government in the next 4 years. Even if Democrats retake Congress in 2 years, Trump will maintain his veto power. So that puts us into 2029, just 4 years before SS payouts drop. That gives me great pause!

Aside from improving sensitivity analysis and monte carlo, what else can Pralana specifically do to help us navigate uncertainties in the present and future? I can't think of anything more than that, but let's see what others come up with.

One caution to keep in mind is that countries have gone beyond the 1 Debt:GDP ratio in history without negative impact. For instance, Japan and Italy 1990-present, Belgium 1980-2000, Singapore 2000-present all had high national debts. There were of course mitigating factors, such as domestic ownership of the debts preventing capital flight, low interest rates, and high economic growth, or asset backing.

I am not saying you are wrong, but it is not a law of nature that these escalating debts will necessarily result in an overt crisis. A lot depends on how the mitigating factors play out. As you know, I am planning for the worse, because that's just how I am.

@jkandell I understand what you are saying but I think it's a little apples to oranges comparison. The US is a LOT bigger the those countries and the US is the bases for the world's economy.

Here is a CNN article entitled "Trump's tax and spending law is a short-term win but long-term headache" :

“We’ve been highlighting the precarious position of the US government’s indebtedness for some time now, and, if left unchecked, we view debt as the single greatest risk to the ‘special status’ of the US in financial markets,” investors at BlackRock said in a June 30 note.

Alan Auerbach, a professor of economics at UC Berkeley, said he doesn’t expect significant short-term effects on the bond market, but in the long run, he expects the debt accumulation will push interest rates higher.

https://www.cnn.com/2025/07/17/investing/us-stock-market-trump-bill

Another Medicaid issue to think about relative to your future expenses:

They don't need Medicaid. But their kids do.

...Medicaid, a program jointly funded by the federal government and states, which faces severe cuts through President Donald Trump's Republican-backed and recently passed reconciliation package. The law directly impacts nondisabled adults who must get a job or qualify for an exemption in order to maintain Medicaid coverage. But advocates are worried about how vulnerable populations might be harmed as states manage funding shortfalls due to other provisions in the law.

The Staggs are on edge. For them, it's no question that the new law could put their ability to cover the cost of their daughter's care in jeopardy. The law slashes the amount of federal money given to states to fund their Medicaid programs, so now states will have to decide which programs to cut.

"These cuts not only impact the people that rely on them directly but also strain the systems and communities that hold us all together," Werner said.

Millions of children and adults with disabilities enrolled in Medicaid rely on the medications, equipment and staff the program covers to stay healthy, survive and be active members in their communities. Without in-home help, and sometimes even with it, family caregivers − frequently mothers − often pick up the slack, switching jobs or leaving their careers behind to care for their kids with special needs. The cuts to Medicaid could exacerbate that reality.

https://www.yahoo.com/news/dont-medicaid-kids-090106384.html

@pizzaman My whole career was spent working with medicaid patients. There are many people on medicaid. It serves an irreplaceable role in providing physical and mental health for the poor and disabled.