Lifestyle Protection Analysis
Fortunately, there is a great tool at our disposal to help us help you zero into an ideal portfolio, balance sheet and cash flow aligned with your circumstances and goals. It’s called our Lifestyle Protection Analysis™.
Simply put, we put important data about your situation and goals into our system. We then run an analysis that tests different stock/bond mixes and spending scenarios against every 40-year period going back in time since 1900.
This means, we are testing your plan through the Great Depression and Great Recession and through every Waterfall decline and long extended Winter period. Of course, the analysis is also showing possibilities through every bull market period as well.
We sort the analysis to assess how each scenario and stress test faired through the Top 10% (Lucky), the Bottom 10% (Unlucky) and Median (mid-point) 40-year periods and utilize the data to help us help you zero into an appropriate allocation aligned with your risk temperament and circumstances.
Scenarios with a low probability of depletion get a PASS grade, those with a 5% or more probability of depletion receive a FAIL rating. Better to get such feedback before making important financial decisions.
Take note that by doing this analysis, we don’t mean to suggest that such an analysis is the only input. We are saying, however, that it is a valuable input to help you and us, as your advisors, make more informed recommendations and decisions.
