Calculating retirement ruin probability
Usage
calc_retirement_ruin(
portfolio_return_mean,
portfolio_return_sd,
age,
gompertz_mode,
gompertz_dispersion,
portfolio_value,
monthly_spendings,
yearly_spendings = 12 * monthly_spendings,
spending_rate = yearly_spendings/portfolio_value
)Arguments
- portfolio_return_mean
A numeric. Mean of portfolio returns.
- portfolio_return_sd
A numeric. Standard deviation of portfolio returns.
- age
A numeric. Current age.
- gompertz_mode
A numeric. Gompertz mode.
- gompertz_dispersion
A numeric. Gompertz dispersion.
- portfolio_value
A numeric. Initial portfolio value.
- monthly_spendings
A numeric. Monthly spendings.
- yearly_spendings
A numeric. Yearly spendings.
- spending_rate
A numeric. Spending rate (initial withdrawal rate).
Value
A numeric. The probability of retirement ruin (between 0 and 1), representing the likelihood of running out of money during retirement.
References
Milevsky, M.A. (2020). Retirement Income Recipes in R: From Ruin Probabilities to Intelligent Drawdowns. Use R! Series. doi:10.1007/978-3-030-51434-1 .