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Simulate a scenario of household lifetime finances

Source: R/simulate_scenario.R
simulate_scenario.Rd

The function simulates a scenario of household lifetime finances and returns a tibble with nested columns. By default no Monte Carlo samples are generated, and only single sample based on portfolio expected returns are returned with column sample=0. If the additional Monte Carlo samples are generated, they have consecutive IDs starting from 1 in the sample column.

Usage

simulate_scenario(
  household,
  portfolio,
  scenario_id = "default",
  current_date = get_current_date(),
  monte_carlo_samples = NULL,
  seeds = NULL,
  use_cache = FALSE,
  debug = FALSE,
  ...
)

Arguments

household

An R6 object of class Household.

portfolio

A nested tibble of class Portfolio.

scenario_id

A character. ID of the scenario.

current_date

A character. Current date in the format YYYY-MM-DD. By default, it is the output of get_current_date().

monte_carlo_samples

An integer. Number of Monte Carlo samples. If NULL (default), no Monte Carlo samples are generated.

seeds

An integer vector. Seeds for the random number generator used to generate random portfolio returns for each Monte Carlo sample. If NULL (default), random seed is generated automatically.

use_cache

A logical. If TRUE, the function uses memoised functions to speed up the simulation. The results are cached in the folder set by set_cache().

debug

A logical. If TRUE, additional information is printed during the simulation.

...

Additional arguments passed simulation functions.

Value

A tibble with nested columns including:

  • scenario_id - (character) ID of the scenario

  • sample - (integer) ID of the Monte Carlo sample

  • index - (integer) year index starting from 0

  • years_left - (integer) years left to the end of the household lifespan

  • date - (date) date after index years from the current date

  • year - (integer) calendar year

  • survival_prob - (double) survival probability of the household

  • members - (nested tibble) data of each member in the household

  • income - (nested tibble) income streams

  • total_income - (double) total income of the household from all income streams

  • spending - (nested tibble) non-discretionary spending streams

  • nondiscretionary_spending - (double) total non-discretionary spending of the household from all non-discretionary spending streams

  • human_capital - (double) human capital of the household

  • liabilities - (double) liabilities of the household

  • portfolio - (nested tibble) state of investment portfolio

  • financial_wealth - (double) financial wealth of the household at the beginning of the year

  • net_worth - (double) net worth of the household

  • discretionary_spending - (double) optimal discretionary spending of the household

  • total_spending - (double) total spending of the household (discretionary + non-discretionary)

  • financial_wealth_end - (double) financial wealth of the household at the end of the year

  • risk_tolerance - (double) risk tolerance of the household

  • smooth_consumption_preference - (double) smooth consumption preference of the household

  • consumption_impatience_preference - (double) consumption impatience preference of the household

  • time_value_discount - (double) time value discount based on consumption impatience of the household

  • discretionary_spending_utility - (double) discretionary spending utility of the household based on the smooth consumption preference

  • discretionary_spending_utility_weighted - (double) discretionary spending utility of the household weighted by survival probability and time value discount.

Examples

if (FALSE) { # interactive()
older_member <- HouseholdMember$new(
  name       = "older",  
  birth_date = "1980-02-15",
  mode       = 80,
  dispersion = 10
)  
household <- Household$new()
household$add_member(older_member)  

household$expected_income <- list(
  "income" = c(
    "members$older$age <= 65 ~ 7000 * 12"
  )
)
household$expected_spending <- list(
  "spending" = c(
    "TRUE ~ 5000 * 12"
  )
)

portfolio <- create_portfolio_template() 
portfolio$accounts$taxable <- c(10000, 30000)
portfolio <- 
  portfolio |> 
  calc_effective_tax_rate(
    tax_rate_ltcg = 0.20, 
    tax_rate_ordinary_income = 0.40
  )

scenario <- 
  simulate_scenario(
   household = household,
   portfolio = portfolio,
   current_date = "2020-07-15"
  )
names(scenario)
}