Retirement Portfolio Analysis



Stephen Horan, PhD, CFA, CIPM, CAIA


I've spent thousands of hours studying the dynamics of retirement portfolio survival. For me, the retirement planning problem is a decades-old companion, with me on hikes, in my classes at Utah Valley University, and when I prepare classes for practitioners.


One of the most important things I’ve learned over the past 30 years is that retirees don’t have to live in fear of depleting their retirement portfolio. A percentage-based annual withdrawal -- such as the RMD or a simple 4% annual withdrawal -- will not kill a broadly diversified portfolio that has at least a 50% equity component.


Income adequacy during retirement is a separate issue, entirely based on the amount a retiree has accumulated. The survival of whatever amount they have saved is far more secure than most people expect.

Helping retirees live with more assurance is one of the greatest things an advisor can do. My work helps advisors and their clients envision the future more confidently through rigorous and intuitive analytical tools.


I’ve spent my career designing portfolio models and analysis techniques to help in this great endeavor and I am honored to share ideas with the wonderful professionals rely on A4A for education.


This course shows advisors how to solve the retirement problem most commonly faced by Americans:  outliving their money.


The three-credit course course provides a system for running a practice, spelling out methods to educate clients in virtual- and  in-person meetings using software included free with the course.


Participants are shown how to illustrate "what ifs" to clients showng their possible financial outcomes based on an Excel spreadsheet algorithm developed for over a decade by a leading educator in designing low-expense retirement portfolios. 


A powerful Excel spreadsheet, developed over the past decade by Craig L. Israelsen, Ph.D., is free with the annual three-credit course. Annual updates to performance data, software, and illustrations of key concepts, along with the quarterly classes refreshing and reinforcing key concepts, make this a sustainable system for professionals.


The retirement analysis methodology complements MoneyGuide Pro, eMoney, and comprehensive financial planning and  the course presents additional perspective for RICP®,  RMA® and other retirement planning prrofessionals. It is available for CE credit on demand.


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A retirement portfolio optimized for decumulation, by definition, must not simply perpetuate the strategy employed during the accumulation phase. For retirees at risk of outliving their portfolios, assets may be allocated more broadly to lessen the risk of bad timing – sustaining a bear market loss just before or after retirement. The sequence of returns looms as a much larger risk.




I just spent my Saturday afternoon listening to Craig’s 2ndclass (out of 3) from May 4, 2022, and was very impressed! He really hit a home run on his presentation. I say this for a number of reasons.


First, Craig has a special knack for making complex things simple. Most people who are not Excel-savvy (like me) generally panic when they see an Excel spreadsheet like the one Craig uses. But somehow Craig makes it seem easy. That’s important.


Second, the content of the spreadsheet is absolutely awesome. When I first showed the old spreadsheet to one of my engineer clients (who is in quality control, so he’s very picky) his response was “well, that was the past. Can it tell me about the future and what will happen to my own portfolio?” He wasn’t trying to be a smart aleck, but just very incisive in his reasoning. It turned out he was asking that theoretically, when he already knew the answer, of course. But that’s not the point of the spreadsheet as Craig explained in Class #2. It was more of an illustration of what a reasonable person who has studied market history might come to expect over the next 96 years. And that reasonable person would have every right to assume the patterns of the past would apply similarly into the future — I know that’s how I would feel.


Third, the addition of the Social Security tab (titled “Cash Flow”) is another great tool.  (It was suggested by an A4A member who attended Class 2 and Craig followed through on his promise to add a new tab. Bravo! This is something that will help a lot of people who are relying on SS for part of their living expenses.


Andrew J. Fama, JD, MHA, AEP®, MRFC®, Real Fiduciary™, practitioner in Rochester, NY, has been a member of Advisors4Advisors since inception in 2009. As a volunteer on A4A’s Editorial Review Board since 2017, he often reviews technical legal, tax, and financial planning content for A4A and was furnished Craig Israelsen’s Retirement Analyzer Software and course for free.




Frank Murtha, Financial Counseling Institute

Craig L. Israelsen, Ph.D., has been a regular contributor to Advisors4Advisors since April 2009 and has taught monthly on A4A for over a decade. He also contributes regularly to AAII Journal, one of the nation’s largest individual-investor-funded information resources with a history of intellectual integrity. Prof. Israelsen has taught about family financial management at universities for over three decades and currently is Executive-in-Residence in the Financial Planning Program at Utah Valley University, teaching classes toward earning a CFA charter. Published monthly in Financial Planning magazine for 25 years, He has a documented history for providing a sustainable system for advisors to manage low-expense portfolios.


Benefits of the course include:  
  • PDF brochure highlighting benefits to consumers of the Retirement Portfolio Analysis Certificate.
  • Scripts and videos educating consumers on retirement portfolio planning .
  • FAQ for your website.
  • Digital badge for website.
  • 5-slide presentation.
  • Answers to certificate-holder questions from Craig Israelsen, Ph.D.about client retirement portfolio planning cases.


Maintaining The Retirement Portfolio Analysis Certificate 

To maintain the certificate, professionals are required to complete two refresher classes annually, which are taught quarterly.  


Three-Class Course Curriculum Annually

Key Variables In Retirement Portfolio Analysis
1 CE Credit
Solving The Retirement Problem For Those On Bubble
1 CE Credit
Retirement Portfolio Survival Sensitivity Analysis
1 CE Credit


Key Variables In Retirement Portfolio Analysis
Designing a retirement portfolio is not simply a matter of extending what was employed during an individual’s accumulation years. For retirees, especially those at risk of outliving their portfolios, assets may be allocated more broadly to lessen the risk of bad timing – that is, sustaining a devastating bear market loss just before or after retirement. In addition, as money is systematically withdrawn, suddenly, the risk of the sequence of returns looms much larger.

The objective of this 1-credit class is to remind practitioners of the key variables that determine retirement portfolio survivability, including:

● portfolio withdrawal rate
● portfolio withdrawal method (RMD vs. $- or %-based amount)
● portfolio asset allocation
● portfolio cost
● adjusted historical performance
● inflation-adjusted results
● period analyzed
● variety of assets utilized

Solutions for reducing the risk of a poor sequence of returns in the early stage of retirement and other retirement portfolio risks are illustrated using a spreadsheet designed by course-instructor, Craig L. Israelsen, Ph.D. The Retirement Portfolio Analyzer, a powerful Excel spreadsheet for solving and illustrating client retirement financial planning solutions, is included with an optional 2-credit elective course.


Analyzing Longevity Of Retirement Portfolios, Class 2 Of The 3-Class Retirement Portfolio Analysis Certificate Course

This class drills into the variables that determine whether a retirement portfolio survives or not.  With the Excel-based “Retirement Portfolio Analyzer” in the hands of each participant, this is a workshop on how to use the software to solve the retirement algorithm by:

    ●  creating a “baseline” asset allocation for a retirement portfolio

    ●  determining the best withdrawal method

    ●  establishing the cost of the portfolio inclusive of fund expenses and your advisory fee

    ●  placing historical returns in proper context


Using inputs for the variables explained in Class 1, participants learn how evaluate and share  results over rolling 25-year periods for:

    ●  retirement portfolio survival or failure

    ●  average annual withdrawal by retiree

    ●  average ending portfolio balance after 25 years

    ●  average total amount of money withdrawn over a 25-year period


Retirement Portfolio Survival Sensitivity Analysis, Class 3 Of The 3-Class Retirement Portfolio Analysis Certificate Course

This class shows practitioners how to conduct “sensitivity” analysis on retirement portfolio variables. Prof. Craig L Israelsen demonstrates ways to use the Retirement Portfolio Analyzer to analyze sensitivity of a retiree’s portfolio to the variables discussed in the previous two classes.  The impact of subtle changes in risk variables is illustrated as well as:


    ●  retirement portfolio survival or failure

    ●  average annual withdrawal by retiree

    ●  average ending portfolio balance after 25 years

    ●  average total amount withdrawn over a 25-year period


In addition to sensitivity analysis, this class reviews the option to “adjust” historical returns as a way of introducing an “optimistic” or “pessimistic” interpretation of what the future may hold, thus, enabling practitioners to tailor client portfolio plans to their personal outlook.




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