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How do I model Asset Allocation in My Plan?
How do I model Asset Allocation in My Plan?

This article describes how to include asset allocation considerations in your projections.

Nancy Gates avatar
Written by Nancy Gates
Updated today

The NewRetirement software does not model any specific assets such as individual stocks, bonds, mutual funds, etfs, bonds or cash.

Asset allocation is accounted forby entering an optimistic and pessimistic rate of return assumptions for each account. While we can't tell you what rates to enter in your own plan, we can provide this general guidance.

The rates you enter will drive the growth of your portfolio in the Planner and affect many aspects of your plan. If you are looking for a point of reference, you might use you current asset allocation, historical portfolio or fund averages, or your 10 year average annual return. The higher the optimistic rate of return, the more variability you’ll see in the Monte Carlo and vice versa.


Cash Accounts

If you are modeling cash accounts, such as general savings and emergency funds, you may consider a very conservative rate of return aligned with current rates.

Cash Accounts Example

The values in this chart are examples and should not be considered recommendations for your model.


Investment and Retirement Accounts

If you are modeling investment and retirement accounts, you should consider aligning rates of return with your asset allocation in each account.

If you would like to know the historical Rates of Return for various asset allocations, sorted by the ratio between equity and fixed income, you may want to refer to this article.

Retirement Accounts Example

The values in this chart are examples and should not be considered recommendations for your model.

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