This first appeared in blog post that describes the graphs in more details https://blog.betterfinancialeducation.com/sustainable-retirement/what-are-the-three-paradigms-of-retirement-planning/ Prototype software example of aging model incorporating both portfolio and longevity percentile statistics along with consumer spending trend line of “Real People” (which is not based here on spending percentile statistics, but on research averages). Starting balance $500,000 with $36,000 Social Security. Two simple graphs by age answer many retiree questions about potential future spending and balances. Creates a whole different discussion. Also illustrates why age 95 is a poor reference for planning since it doesn’t plan or consider aging into future ages from the beginning of retirement.

1. Prototype software example of aging model incorporating both portfolio and longevity percentile statistics along with
consumer spending trend line of “Real People” (which is not based here on spending percentile statistics, but on
research averages). Starting balance $500,000 with $36,000 Social Security. Two simple graphs by age answer many
retiree questions about potential future spending and balances. Creates a whole different discussion. Also illustrates
why age 95 is a poor reference for planning since it doesn’t plan or consider aging into future ages from the beginning of
retirement.
Joint Today's Dollars / Real Returns / Cash Flows or Spending Today's Dollars / Real Returns / Retiree or Heir Balances
45% of Joint people at age 65 outlive age 94
Balanced allocation 50/50 Indexed stocks/bonds
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
66 69 72 75 78 81 84 87 90 93 96 99 102 105 108 111 114
Cash
Flow
Age
75th 50th 25th Conceptual Real People
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
66 69 72 75 78 81 84 87 90 93 96 99 102 105 108 111 114
Account
Balance
Age
75th 50th 25th
Joint Today's Dollars / Real Returns / Cash Flows or Spending Today's Dollars / Real Returns / Retiree or Heir Balances
35% of Joint people at age 75 outlive age 96
Conservative allocation 40/60 Indexed stocks/bonds
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
76 79 82 85 88 91 94 97 100 103 106 109 112 115 118 121 124
Cash
Flow
Age
75th 50th 25th Conceptual Real People
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
76 79 82 85 88 91 94 97 100 103 106 109 112 115 118 121 124
Account
Balance
Age
75th 50th 25th
Joint Today's Dollars / Real Returns / Cash Flows or Spending Today's Dollars / Real Returns / Retiree or Heir Balances
25% of Joint people at age 85 outlive age 100
Defensive allocation 20/80 Indexed stocks/bonds
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
86 89 92 95 98 101 104 107 110 113 116 119
Cash
Flow
Age
75th 50th 25th Conceptual Real People
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
86 89 92 95 98 101 104 107 110 113 116 119
Account
Balance
Age
75th 50th 25th
Female Today's Dollars / Real Returns / Cash Flows or Spending Today's Dollars / Real Returns / Retiree or Heir Balances
15% of Female people at age 95 outlive age 104
Defensive allocation 20/80 Indexed stocks/bonds
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
96 99 102 105 108 111 114 117 120
Cash
Flow
Age
75th 50th 25th Conceptual Real People
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
96 99 102 105 108 111 114 117 120
Account
Balance
Age
75th 50th 25th