When I install the latest version, do I lose the earlier versions of the program? No. Each edition/version is standalone; when you download a different version/edition, it does not erase or overwrite another edition/version. If you download the same version, you will get a warning about overwriting existing files.


Can I load/run two different versions at the same time? No. You can only run one version at any given time.


I just installed the program. I tried to run it but I get an error message. Help!


Look at the bright side: Once installed correctly, you never have to deal with this issue anymore. However, until it works, there are several reasons why the program might not work. Here is a check list that might help:

I ran scenarios before. I got an error message!

After running my scenarios, I try to close and exit Exit the program and I get an error message!

Open the Excel with a blank spreadsheet

Click/ File /options/ Addins  

 Click on Excel Add-Ins “go”. All items should be unchecked:



How do I make sure my Office program is VBA enabled?

You might want to follow instructions here


Running Windows 7 Professional.  No such path or folders "(Excel / File / Options / Trust Center / Trust Center Settings / Trusted Locations / Add new location) - cannot install. Advice?
"(Excel / File / Options / Trust Center / Trust Center Settings / Trusted Locations / Add new location)" : This is not a path. It is the sequence of the command buttons to add the location C:\ORC2017Simple to trusted locations list. Click on file in Excel, click on Options button, click on Trust Center... and so on.


Where is the default folder for the saved scenarios?  I would like to make a backup of these files but I can't locate the folder.
The scenarios are saved in folder C:\ORC2017Simple, in file SavedScenarios.xlsx. Other defaults are saved in file VAData.xlsx. If you are making a backup, you might as well backup the entire folder that way you know for sure a data file goes is backed up the correct version.


Are you planning to move to web version? No.


Will your software run on Macintosh versions of Excel? 



Printing Problem: No matter what I do, regardless of which color printer I use, I get this strange printing on each page – can you help?
Did you install a new printer and this started happening? Please check your printer settings: Resolution 600 dpi or better, "save" mode off, print setting graphics.


Punctuations: In some versions of Excel, punctuation marks can cause reference error ("#REF"). Try not to use them in any item descriptions (comma, double or single quotation marks etc).

How can I move the program from computer "A" to computer "B"?




Do I have to update yearly? Are there any ongoing charges?
Each year, I add another year's market data. If you are happy with 114 years of market history, you don't need to update it. However, most users update for the new features that I add each year.


Please explain if I can use the program to estimate better my chances of not running out of money from my asset allocation? Also, how different is your program from, say, Sharpe's financial engines?
You may be confusing the benefits of asset allocation with the luck factor. Luck factor is the largest component of the success of a retirement portfolio. This factor alone determines whether or not you will run out of money during retirement. Please read my article on my website about that. Asset allocation is just icing on the cake and not the cake itself. Yes, in my program, with the click of a single button, you can optimize the asset allocation that gives you: The highest dollar amount in the portfolio, the lowest probability of depletion or the longest portfolio life, or any combination of these three. The program will clearly indicate the optimum point. This optimum asset mix is not based on statistics, standard deviations or other academic jargon, or data manipulation; it is based on actual market history, applied directly to your own personal cash flow picture. As nice as this sounds (others would sell to you this feature alone as "the best thing since sliced bread"), optimizing the asset mix is just one of the tools in retirement planning in my program. My program will give you the combination of other tools, such as any combination of investments, life annuities, variable pay annuities and variable annuities with guaranteed pay - all in one package.


What do you use as the fixed income return?
Nominal Bonds: The model takes the historic interest rate for 6-month deposit and adds a 1% premium. It reflects approximately a fixed income portfolio with an average duration of 5 years, held to maturity.  

Inflation-indexed bonds: The model uses historic inflation plus 1% as real rate of return.   


What difference does it make what my average MER is?
MER (Management Expense Ratio) is how much your mutual fund is charging you to manage your money. It generally varies between 1% and 4%. All mutual funds disclose this information. If you have a wrap account, add all costs, including the WRAP fees and management fees to come up with a MER. If held for the long term, MERs eat into your returns and shorten the portfolio life. Keep in mind, there are several other factors, such as bad asset allocation, bad investment selection, investor psychology to name a few, that can do a lot more damage than MERs. 


Why should I have annuities in my portfolio?
Just like we like to diversify our "investment portfolios" to reduce the volatility risk, we need to diversify the source of our cash flows to reduce the risk of running out of money. A life annuity usually pays a higher  periodic income than the sustainable withdrawal income from an investment portfolio. By placing some of your assets in an annuity, you are reducing "the withdrawal stress" from your portfolio, which likely extents its life.  


For clients in 100% green zone, what allocation to equities and fixed income do you use?  I would thing 40% equity and 60% fixed to still be ok.  Your thoughts?

I’d still use 40/60. I believe that the amount of risk one can tolerate should not change with how much assets one can lose but how much assets one wants to keep.


What is reverse-dollar-cost-averaging?
It is taking income from your investments on a periodic basis. You may have heard of dollar-cost-averaging; investing periodically over time. Dollar-cost-averaging reduces the average cost of your investments because it takes advantage of price fluctuations.

The reverse-dollar-cost-averaging works against you. Because, once you sell part of your investment to provide you the periodic income, and if it is a bear market, then your losses are permanent. When the market comes back, you no longer have that part of your investment to participate in the rise.

My estimations show that whatever benefits dollar-cost averaging has through a bear market, the reverse- dollar-cost-averaging  has about three times as much of a detriment to your portfolio for the same bear market. Therefore there are two things you have to be very careful of:  

1. Always take your income from the least volatile investments, such as money market, 

2. Do not rebalance more often than what is required for an optimum portfolio.  For more info on this, read my award winning article.


If I understand your software correctly, it gives us a representation of what might of occurred if an investor had invested/withdrawn assets over a given period of 40 years, i.e. it starts at 1900 through 1940 and plots out the effect on capital, then 1901 through 1941 , 1902 through 1942 etc. and gives us a sense of how that portfolio performed during those historical periods through to the present. How does it deal with recent periods, say 2000 to 2013, which is less than the projected period?
The time period studied is the lesser of 40 years or -for retirement years after 1973- it is the number of years up to and including 2013.
For example, if starting year is 2000, there are only 14 years of history (Chart1). The table below the chart gives you all portfolio and cash flow numbers for each year starting in 2000.

What happens after 2013? I don't know. No one does, we will have to wait and see next year.

Our intent is not necessarily to "project" anything into the future; only to show the worst and the best of any year during the last century.  It will take another 17 years to have a full 30-year history for someone retiring in year 2000. At that point (in 2030) we shall all see how he would have fared. However, in all likelihood, we will see the ruthless outcome of high tech crash and credit crisis crash (and perhaps more to come) in about five years or so on that person. 

The success ratio (probability of depletion) only includes completed history.


In the User Guide states inflation is not a needed input. How does the calculator handle the affects of inflation? Are historical inflation rates used each year and the amount needed to be withdrawn is increased accordingly? I guess I am asking in the “Tables" tab on the schedule that states how much is withdrawn each year, how does the program decided how much to increase the amount needed?
The program uses the historic inflation for each year since 1900. Between 1900-1913, it uses the US Bureau of Labor Statistics wholesale price index. After 1913, it uses the Consumer Price Index ( Note: The Consumer Price Index did not exist prior to 1913). The program uses these for indexing the periodic withdrawals/deposits for each age and for each year starting with the current age and ending at the specified age of death. 

In the Tables page, because of space limitations, we don't show these numbers (withdrawals/deposits, annuities etc) for each year of retirement / for each age / for each year since 1900. So, only the averages for each age are indicated in the "Tables" page.


I have been reading The Misbehavior of Markets by Benoit Mandelbrot and some of his premises and conclusions seem similar to the premises and conclusions underlying your Retirement Optimizer software. Would you say that your software is an application of Mandelbrot's multi-fractal model of market behavior (chaos theory)? Do you know if his mathematical model has been incorporated into any retirement planning software?

I don't remember seeing any retirement calculator based on chaos theory. Mine is based on actual market data (which can be chaotic at times!) and I don't intent to curve fit it to anyone's model. I am uncomfortable taking historic data and try to mould it into some statistical equation. I rather use the actual data. 


How and where do you take account of taxation of investments and incomes?  
Taxation is another expense. There is no separate tax entry. You must include all tax expenses in "Total Periodic Income Required after Retirement" box on the "Main" page.


I'm planning to work on a case with one of my long distance clients.  Will I be able to e-mail her pages out of the workbook as we change scenarios.  So far I haven't had success trying this.  Suggestions? 
If you want to email pages as a pdf file, then you need to have pdf file writer installed on your computer. With that software installed, after you load the ORC, then set your default printer as "pdf writer" (or something like that) then click on the print entire worksheet button on the main page, and the entire workbook will be saved as a pdf file. You can then send it to your client with your email. (Note: Page formats are different, so it will print it into several separate files.)


I load the program, but once I enter my figures, all of the probability of depletions on the main page are 100%. Why? 
In some language settings, the decimal point in North American English way of writing is a comma. If this applies to you, just set your numeric format to international. 


The lucky column on the optimization page changes depending on my inputs in the asset mix column on main page.  I am reading this table incorrectly?
The program may choose a different age -than the age of death- to calculate these values. If it has too many "zeros" at a specific age, then if will reduce the age and then it will analyze the optimum at a younger age.


I have a concern with how we are computing the MRDs so that the client has adequate funding for living until 100. As an example I have a client with his only asset is an IRA at $3.3 mil and needs $170,000 per year to live. This $170,000 needs to be adjusted for inflation. How do we explain the higher withdrawals and taxes? I think I know but would like to know your thoughts.
You just need to enter tax expenses as another line item in your estimation of retirement expenses. The program does not increase withdrawals to account for the increased tax burden for the MRD.
There are two situations when MRD kicks in: 1. When the withdrawal rate is less than the sustainable withdrawal rate and 2. When the retiree gets lucky and catches a secular bullish trend throughout his retirement.

In your example, his withdrawal rate is over 5%, so the MRD will not kick in unless he is lucky.

Any excess money as a result of the MRD is taken out of the portfolio. The retiree can either save it some where else, or spend.

Will you allow us the ability to illustrate for a certain timeframe (i.e. S&P from periods 1995-2005, or 1970-1980) to give the client an idea of what certain periods could mean to their portfolio. 
The program shows the best, the worst and everything in between during the last century. You cannot pick and choose the time frames to suit your preferences. Allowing this may open the door to potential abuse of selective-presentation to clients. If you want to know a performance in a particular year, just go to the Chart1 page and move your mouse over the gray lines.


Make sure your Excel options enables this feature:  



I am a financial advisor in the U.S. - found your website and have been devouring your articles.  I am ready to buy the retirement calculator but I'm wondering if you have an explanation for the following:  

On one of the fund sites, they have a calculator that claims to be based on actual market history dating back to 1926.  Simply choose one of three asset allocations (Conservative, Moderate, Aggressive) and the length of retirement, and the calculator spits back a Withdrawal Rate. The withdrawal rates for the "conservative" portfolio (35% stocks) are slightly higher (but pretty close) to the sustainable withdrawal rates that you suggest in your teachings.  However, in every case their rates are substantially higher as you go to portfolios that are more aggressive.  Yet, in your teaching, you indicate that equities above 40% will actually decrease the chances of portfolio survival. They claim: “In this calculator, we create 81 different simulated "time paths" for the evolution of your portfolio by first assuming that you begin taking withdrawals at a specific point in history (e.g., 1926, 1927, 1928). We then use the actual, historical rates of return that occurred in each subsequent year from that point forward, applying them in sequence to your portfolio as time rolls forward. If such a path needs to go beyond the year 2006, we just loop back to the returns of 1926 and cycle forward from there until either your assets are depleted or the end of your planning horizon is reached. Given the past historical data we use (returns from 1926 through 2006), we end up with 81 different starting years with 81 different time paths. The monthly withdrawal amount shown by the tool is the highest level of spending in which 85% of these historical paths would have left you with a positive balance at the end of your chosen investment horizon.”

What is the flaw in such a calculator?  The typical person who uses this is going to insist on a portfolio of 65% equities and think they can withdraw 5.25%.

As you suspected, statistically and mathematically, I believe that this model is flawed. The loopback assumes that after 2006, we will experience another secular bullish trend of 1926, meaning that the cyclical bullish trend that started after the year 2000 crash (which is similar to the 1933-1937 cyclical bull market) will continue another three years (the loopback years of 1926-1929).  Is it probable? Never in history a secular bull market lasted over 20 years, and this flawed loopback simply makes the secular bull markets of 1982 to 1999 to turn into an unusually long secular trend of 1982 to 2010, i.e. 28 years. In principle, it is a bad idea to combine facts with fiction. If you are going to present this program as a "factual" outcome, then you must not add an imaginative loopback. If you do that then the entire outcome becomes "fictional", not partially, but entirely... 

Next: Probability of depletion used: It appears that they are using 15% probability of depletion (POD). This is too high. I limit the POD at 10%. Using the actual historic data, I find that once you cross over the 10% POD, then irreversible events can happen. There is a big difference in the ability of salvaging a portfolio to create a lifelong income, when one uses a probability of depletion of 15% instead of 10%, if you are retired already.  

However, market risk only one of the three risks in retirement planning: 

1. Market risk : which is the probability of portfolio depletion by the age of death. As stated above, 10% is my limit. 

2. Longevity Risk : which is the percentage of surviving clients at a given age: My limit is 10%. Which means generally , use age 95 as age of death 

3. Inflation Risk - the withdrawals not keeping up with inflation. My limit is 10%, i.e. the purchasing power must go below 85% of the requested amount in any of the portfolios that are subject to rules one and two. (i.e. even if the criteria for the market risk and longevity risks are met as per stated thresholds in #1, and #2, the loss of purchasing power must not exceed 10%. This becomes important when we talk about variable annuities or EIA. 



Printing Problem: No matter what I do, regardless of which color printer I use, I get this strange printing on each page – can you help?
Did you install a new printer and this started happening? Please check your printer settings: Resolution 600 dpi or better, "save" mode off, print setting graphics.


Here are my printer property settings:



When we "optimize" a portfolio, the spreadsheet shows values and allocations at age 75. We are not clear why that age appears and is apparently unchangeable? Also, when we "optimize" a portfolio, we have input a certain initial allocation (for example 85% equity, 10% FI, 5% IIB). Does the new optimum allocation start then at age 75, or has that been reset to the very beginning or the calculations?
When optimizing, the program looks for an age as close to the age of death as possible. If you entered age 95 as age of death, the program will start there to optimize.

However, if there is no money left in the portfolio at age 95, then there is nothing there to optimize. Then the program will decrease the optimization age in 5-year steps until it finds some numbers it can work with. It is not something that can be changed by the user; behind the scenes, it is a complex linear-programming process at work.

If you start with a way-off asset mix and then run the optimization, the optimum asset mix will show a wide range. Move the slider to inside the green area and click on the optimize button a second time to make sure that is remains inside the green band.  

The optimum asset mix always starts at the current age, not some time in the future. For calculation purposes, it is constant for life, in theory anyways. But in practice, the optimum asset mix will likely change because of changing financial circumstances of the retiree, or after extreme market events that deviate from the market events that occurred last century. You should run the optimization at each annual review.


Why can’t I “optimize” a portfolio for an 81+ year-old person?  Program keeps saying “not sufficient time horizon available"
Program needs a time horizon of 15 years or more for optimization to run. Anything shorter, even the most optimum asset allocation will get caught in short term events.

Just increase the age of death ("design until age") on the "Main" page so that it is at least 15 years higher than the current age. Then it will work.


I tried to read the user guide to check it out and it says "No program is registered to open this file"

1.      You need to have adobe reader. You can download one from for free

2.      You need to make sure to associate the pdf file with the acrobat reader.

 You can use your control panel to do that.  


Can you give me a hint about saving a report as a PDF? You indicate it can be done from the print protocol.

1.   You can make pdf files only if you have a pdfmaker software. First, set your printer as the pdf maker


Next, click on the print button, follow instructions (file name, where to save, etc.). Note that since the page format of each page is different, the program will ask each page separately. You might end up with five or six separate pdf files which you can bind together with your pdfmaker software.


I am wondering if  there's an easy way to get the average implicit rate of return for the various scenarios i.e. lucky, unlucky, median?

Yes. On the Main page, check the box “Show Forecast”. Vary the growth rates until the orange line overlaps the median line. That is your implicit growth rate for a median portfolio. Same process for unlucky and lucky.