Life Time Planner- Monte Carlo simulations?
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No...they do not.0
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I would concur with Prabu to add a monte carlo option in Lifetime planner to the existing deterministic model - say an advanced model v simplified model. There is a whole host of Monte Carlo simulation apps online. I use Merrill Edge and Fidelity once a year and compare to my Quicken Plan. There are many more. They are enlightening and sometimes sobering.
Leveraging the existing and extensive modeling in Lifetime Planner, Monte Carlo is an excellent addition for stress testing your plan using standard deviations (volatility over time) of important variables like rate of return and inflation. Then, displaying the results of your plan against a "confidence of success" level. Think of doing 10 000 runs of Quicken's "What-If" tool, each time randomly varying each of these variables according to their standard deviations, then showing your plan's probability of success - Ex. My plan succeeds 82% of the time. If your interested in reading more: https://www.investopedia.com/financial-edge/0113/planning-your-retirement-using-the-monte-carlo-simu...
As it is today, Quicken assumes that you are able to guess average values for these important variables. Good luck to us! Most of us take our best stab (or not) at average rates of inflation, average rates of return for our particular investment mix, average tax rates and average spend-downs. Your result then is an average result - 50%, pass/fail. I would like a bit more certainty factoring in historic deviations from the mean.
I would really be excited to see a Monte Carlo option in Lifetime Planner as well as features around "bad timing" and sequence of return risks. Also, there are a number of planners out there that model retirement draw-down strategies (safe withdrawal rates) factoring in the most tax efficient approach.
Lots to consider in modernizing Lifetime Planner. But, I would first address some of the fundamental bugs (contribution levels in tax advantage accounts, RMDs, SS calculations among others) AND commit to keeping these tax and SS related items current!
What ever the approach here, one still need to have some basic insight to planning and understanding of the tools limitation and results....a fool with a tool is still a fool, as we used to say.
Quicken, Buy and integrate or build it yourself but these are the tools that are now common in the retirement planning market. Lots of options to further expand and integrate existing Quicken tools - Make it sticky and leapfrog upstarts in the PFM market.
Thoughts about a modern Lifetime Planner? Vote it up if you like the concept.
Scott
2018 QW HBR r6.11
PS. There was a very extensive discussion on this forum a number of years re: Monte Carlo. I'm not able to find it. If you find it, please link it here! I think I remember seeing prior to the last "reset" of get satisfaction.2 -
Hello All,
The Community Support team regularly reviews long-standing posts and Ideas for relevancy and current interest. This Idea seems to have stalled and we would like to gauge the current interest in this request.
If you would like to see this idea implemented, please add your vote and a comment explaining how this idea would be beneficial for you. More information, including steps to vote and how to submit your own Ideas for future product features/improvements, is also available here.
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-Quicken Anja
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I use Personal Capital to run monte carlo simulations for me. If there tracking platform gets better i can see me swapping to it and leaving Quicken. It is a free platform. If you want to keep high end users you need a monte carlo simulation in the Life planner.0
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I agree that Monte Carlo simulations would be a valuable addition to the Lifetime Planner. Because the LTP has access to Quicken's detailed financial information, it is better positioned than most other tools to make reliable predictions.QWin Premier subscription1
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While Charles Schwab provides Monte Carlo analysis to me, it would be immensely helpful to have the ability to stress-test the LTP in real-time by changing this or that variable. If Quicken is going to provide an LTP, then it also needs to up it's game to make the results more meaningful, the tool more useful.
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Be sure to hit the vote button!
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Yes, agree. Need to implement to effectively compete with Personal Capital alternative.
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Lifetime Planner should have Monte Carlo simulation
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Yep, and a lot more….
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Personally, I find it ironic that both Quicken Windows Canadian and Quicken Mac want this feature and point at Quicken Windows US and say "They have it, why can't we?". When in truth, if it wasn't for the fact that it was put in decades ago, and barely touched since, Quicken Windows US wouldn't have it either. And when queried about when some updates like just changing the RMD year for the tax laws that changed years ago, the answer is "We don't think we will get to it this year (referring to 2024).".
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I've used Quicken since 1996 and I may move away from it without a Monte Carlo simulation added or at least integrated.
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