How can they have only two stages, pre and post retirement. What about the cash inflow of the other half of the trust, and two kis’s college education? Are they supposed to increase the number of stages?
The key to this one was the mortgage payment and the retirement distributions… The mortgage payments stopped exactly when they were planning on retiring and once they retire the spending disbursements start. Drawing out a timeline and showing the cashflows shows that there are two distinct “sections” of the time horizon. The kids college fund wasn’t guaranteed so that would be an unexpected need for funds. Also, receiving the other half of the trust doesn’t affect their investment strategy other than to allow them to take on more risk because of a larger asset base. But this didn’t change their spending/return needs. At least that was my understanding an hour ago when i took it 