The Big Picture App

The Big Picture App helps investors answer the essential questions, “How much money do I need to save for retirement, and how much can I safely spend in retirement?”

The app lets financial advisors build the retirement portfolios of their choice, and back-test them over rolling historical periods. Advisors can illustrate for clients the success rates, safe withdrawal rates, and portfolio longevities associated with a given asset allocation and expense ratio.

The program relies on the actual historical performance of indexes, using monthly-frequency total return data. Two same-length retirements have, in some cases, experienced wildly different outcomes—even when they have started just months apart. By capturing many hundreds of rolling historical periods, the app yields deep insights into the sustainability of a given strategy.

The historical approach featured in our app distinguishes itself from the “Monte Carlo” forecasts used in all other planning tools. MC requires that assumptions be made about the future returns, volatilities, and correlations of the asset classes contained in one’s portfolio. It then uses these inputs to randomly generate hypothetical portfolio trajectories.

Our tool does not make predictions; it shows only how one’s strategy would have fared in all the real-life retirement environments that have so far come to pass.

Did a given retirement strategy survive history’s worst periods? If so, it may well survive whatever misfortune arises between now and the end of retirement. Or did it produce a shortfall, even in the stock market booms of the 80s and 90s? If so, it may fall short in the years ahead, too.