Have you thought about how if you are prepared for retirement?

Retirement is exciting and daunting for many of our clients. A client couple of Freestone thought about retiring for a few years, but were unsure if they had enough money to support their current lifestyle in retirement. We sat down with them and went over their assumptions: What if they moved? What if one of them got sick? What if their son or daughter fell on hard times and needed financial assistance?

To ascertain whether they would be prepared for these adverse situations, we first created a financial plan to understand their current baseline and take into account these “What if?” scenarios. We then used a Monte Carlo simulation to stress test their portfolio. The Monte Carlo method of risk analysis identifies thousands of iterations and assigns a probability percentage to the outcome of a given scenario. When you know what you are trying to accomplish – in this case, whether or not our clients could retire in the next few years – you can build a mathematical representation of various outcomes in an effort to help evaluate the possibility of future outcomes. 

The Monte Carlo simulation calculates a probability of success across any number of complex scenarios, and, depending on the computed probability, is a factor in helping us determine whether the client is in a positive financial situation. 

After reviewing the Monte Carlo probability results, we determined that our client could retire comfortably in one year and felt prepared to tackle any of their “What if?” obstacles we laid out in their financial plan. 

Location

Seattle, WA

Service(s)
  • Client Goal

    Align resources with financial goals

  • Years with Freestone

    3 years

  • Actual

    Peace of mind knowing they won't outlive their retirement

More client stories

Ready to get started? Contact a Client Advisor