My savings is considerably lower than it was at the beginning of this year. Going forward is it advisable to adjust ESP with the present saving's amount and go forward from there? How are some of you other users handling this market downturn within ESP?
-Joe
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For those of you using Monte Carlo, the early numbers from last year have been incorporated into the large cap stock rate of return already. The various sources we use to update these numbers publish their books right about now and the MC should have updated numbers available in the next update (scheduled 01-May-2009).
The problem is that the ESPlanner "clock" ticks on a yearly basis and doesn't respond to events that happen in-between ticks, like the current bogosity with the markets.
It comes down to what you believe will happen going forward. If you think a recovery is just around the corner, don't change anything.
If you think these losses are structural (permanent), then, basically, reset your savings at the beginning of this year to their current values and plan on that going forward.
Note that the second is a more conservative position than the first and, hopefully, any surprise you receive using that position will be a happy one (you'll have more to spend than you thought).
It's not an either or thing, just copy your current profile, modify the savings values, and off you go. The comparison will be pretty depressing though.
Best,
Dick Munroe