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Investing/Strategies / Retirement Investing
|Subject: Re: Strategy comparison S&P500 vs. IUL [rev 1]||Date: 4/4/2013 7:40 PM|
|Author: Rayvt||Number: 71714 of 80007|
On a simple annual point-to-point the opening day and anniversaries are the market data points. If the ultimate year's returns were 12%, then any principal balance in place from the initial anniversary gets a credit of the full 12%,
Yes. That't the way I did it.
and any subsequent mid-year contribution gets a pro-rated credit according to the portion of time in.
I didn't do that. I just credited the entire year's worth of additional contributions all at once.
[Let me check... be right back....]
Yes. No prorated credit.
New value = (gain_factor * (old_value - expenses)) + all intra-year deposits.
I can change it to a better approximation. Assuming level additions, on average, full gain on the average annual additon balance is Close Enough. Adds to the complexity, though, so CC will scream. ;-)
Yup, it makes things a bit better. For $10,000 & $100/mo, ends with $351,300 instead of $343,700
At the anniversary, all original principal, plus any accumulated growth to date, is considered principal going forward. The straight PTP IUL equity curve is more of an annualize upward zig-zag stair case, climbing to match the naked S&P to the cap, & sitting flat the entire year when the S&P drops.
Yes. What "rolling 12-month" means is this:
Some people have a Jan anniversary. Some have Feb, some Mar, etc. With a large enough universe, 1/12 of the accounts will have their anniversary in each month.
Now, due to sheer happenstance and randomness in the market, sometimes a Jan account will pull ahead of a Feb account, and sometimes a Feb will pull ahead of a Jan. The amount an account