#501 - Historical vs. Projected Returns?

Should you use historical or projected returns in your retirement model? One of our listeners asks this question in a very eloquent way.

On this episode of Retirement Answer Man, I’ll spend some time on this question and share my thoughts on which type of model you should use. You’ll also hear the answers to several other listener questions before Kevin Lyles and I discuss tips for having successful conversations with your spouse in retirement.

Should we use historical data or projected returns to build our retirement model?

One of our listeners, Howard, makes a strong case for using projected returns to forecast your retirement model. He feels that historical data won’t be an accurate predictor of future returns since we find ourselves at a unique point in history.

What do you think? Do you feel strongly about using historical data or projected models? My opinion on the best choice might surprise you.

If this question interests you, get ready to put your geek hat on and nerd out a bit while we spend some time discussing this optimization question. If you’re not terribly interested one way or another you can listen to my short answer version and then skip ahead to the next questions before hearing my conversation about bettering our relationships with Kevin Lyles.