What’s your Big Picture say?
What is “the Big Picture?”
The Big Picture app is an eye-opening web-based application for wealth and retirement planning. It allows investors or retirement plan participants to compare different asset allocations (stock and bond mixes), savings periods, withdrawal rates, lengths of retirement, fees, and instantly back-test it over hundreds of historical investment periods.
Would your retirement strategy have survived the Great Depression, hyperinflation, and 1970s stagflation? If so, it may well survive whatever misfortune arises between now and the end of retirement. Or would that strategy have produced a shortfall, even in the stock market boom of the 80s and 90s? If so, it may fall short in the years ahead, too.
It provides users with personalized visual perspectives on questions like:
Based on history...
Shortfall Risk: How likely am I to run out of money?
Safe Withdrawal Rates: How much can I sustainably spend in retirement?
Asset Allocation: Would altering the composition of my portfolio improve my odds?
Endless "what if" scenarios can be explored. "What if spending were raised, or lowered?", "What if retirement lasted a few years longer?", "What if this asset allocation was chosen over another?" And so on.
Two perspectives
The app allows users to model their strategy from two perspectives. First, saving for retirement and second in retirement. This allows the user to evaluate dimensions they control and that truly matters.
Saving
Monthly Contribution – How much do I need to save each month?
Savings Period – How many years will I need to save for?
Savings Goal – How much will my portfolio grow?
In Retirement
Safe Withdrawal Rate – How much can I safely withdraw from my portfolio?
Length of Retirement – How many years will my portfolio last?
Initial Capital – How much do I need to invest to support my desired spending?
How it Works
The Big Picture app functions on the basis of rolling periods. Because our historical data are monthly in frequency, and span many decades, the Big Picture app covers hundreds of rolling periods. In this way, the app allows you to select an investment horizon, and judge the performance of your chosen portfolio over every same-duration horizon that has ever transpired. Other tools focus on historical performance over a single period, often of relatively short duration, or using a single long-term average. The difference in statistical meaningfulness is crucial.