Rebalancing:

Refresh the plan

  • Assets—update values

  • More realistic income balance and spending trends

  • May choose a ratio of 60/40.

Re-Run Feasibility

  • Monte Carlo or similar model

Rebuild 5 yr Cash Flow Estimate

  • Each year predict income, spending, and tax

  • Rebalance to have confidence in living

  • May need to adjust asset location

  • Allocation study, account by account, and investments in them

How much contingency (buffer) is comfortable?

  • Refilling 5 yr Income floor

  • Refill once/year, unless a significant life style change

  • Have the next 5 yrs funded. Most important early on—if before SS or pension income comes.

Up to Age 70

  • After 70, SS kicks in

  • Lifestyle and travel slows down

Michael Wei