Friday, June 22, 2018

Monte Carlo Odds

11:25 AM



Questions:

I modified the LIF payment, I had accidentally added the excess payment twice. which brings the LIF payment down several thousand dollars.

I still have the massive contradictory outcome of a 44 probability (Monte Carlo) and a $223,813 in her LIF at death.

Answers:

If you look at the second chart on the Income Forecast tab of the "View" page, you'll see that because LIF withdrawals are restricted by the maximum, the client cannot meet the retirement income goal from CPP, OAS and LIF.

Either you have to reduce the goal or find another source of income to make up the small shortfall each year.

The only cases where the Monte Carlo simulations succeed are those with very high returns and the high asset balances permit higher maximum  withdrawals that together with CPP and OAS meet the goal. That's why the probability is low.

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