A Note on a Portfolio Longevity Heat Maps

A friend of mine asked me once "what is even the point? How would you use this?" with respect to a heat map that I created for portfolio longevity for a whole slew of different spend rates (see below). First of all, when I first created it years back it wasn't really about functional utility at all for (my or others') retirement finance it was more just plain curiosity and, as is often the case for me, I wanted to see what it looked like. The looking was its own utility. Second, I kinda liked the eventual outcomes that became more evident the closer I looked: 

- Spending is almost certainly sustainable for 2% spend rates which effectively creates a perpetuity. This is a point about endowments that Ed Thorpe made in one of his books. 

- Spending somewhere near to or less than what one expects to earn or earns -- where the long run "earn" is going to be the geometric mean at N periods or maybe infinity -- has pretty good odds of lasting a very long time (maybe too long given our horizons but then again this is not a human scaled fail study). This is common sense, right? Higher spend works too but to an increasingly lesser and potentially painful degree as the "portfolio longevity years" come back into the meat of a human life scale. 

A Note on Lifestyle and Ensembles

 Ithaca, or maybe it was Lavinium, waits for thee.

"There are places where one arrives and feels: here I am meant to be, here I am whole. I had not known this place, yet it knows me, and I it, as if I had been born for its silence and its light." Rilke

Several years ago, before my recent brush with stage 3.99999 prostate cancer, I finally (finally! after six decades) was able to choose for myself a life -- lifestyle, location, focus, purpose -- that made a whole lot of sense to me.  This meant a little less quant and a little more right brain and active movement than I pursued in Florida. In practice all that means right now, in Montana, is stuff like: hike, lift, read, enjoy the landscapes, feed the cat, do some photography, take some western road trips, travel a little to see kids and gf, and so forth. And...less, but not zero, quant as a byproduct.

What I was up to last week

 You may have noticed that I have not been out here on the blog much for the last three years. This gap is from some combination of:

- I saw what I needed to see, I got a sense for the shapes of misc retirement models and math. Felt like I was more or less "done."

- Counterintuitively I do not use, as part of my regular monthly retirement management, the analytics I was building and putting out here for a decade. Too much work and there's no impending personal finance crisis (yet) and how many times can I run a model before I "get it" and it is all internalized anyway. I am a client of one!

- I was using my move to Montana as a big ol' inflection point: left brain stuff to right, sedentary to active etc etc. Basically now that I am here in the west it is only: read, hike, lift, and feed the cat. Not in the mood to code or do quant posts. I still respect my choice but this post is to describe some new things with which I was playing last week. 

Prostate Cancer Update

 The blog is not dead! and neither am I. Here are the cancer updates since before July:

1. I had surgery (Robot Assisted Laparoscopic Prostatectomy or RALP) at Mayo Clinic in Rochester MN on July 10 and carried a Foley catheter in Rochester until July 17th (oof). 

Reframing My Mortality Risk - Actuarial Chat with Grok

Or the proper subtitle: on why I am neither on death's door nor a superman -- where the implication might have been that I once thought myself a superman -- but now I think I am just an average American man...sort of. 

The following post* is a chat with Grok after I had a "prostate cancer genomic classification" test come back recently with a really bad and off-putting score. The purpose here was to contextualize for myself -- using my amateur actuary-sleuth blog past -- the received score (which said I had a 15 year expectation of mortality of 29.1%) and the concurrent two thoughts: 

1)  "holy sh*t, that's really high" and 

2) "hey, wait a second, isn't that new estimate pretty close to the actuarial expectation for, like, every man? ...isn't that more or less all of us, that is if we are not superman?"

This chat is bit long, a little repetitious, and a little esoteric. Some of the AI response-summary stuff below kind of get's to the point a little faster if you want to speed. The TL;DR is that my now "updated" (a bit of an abrupt update I must say) at-age-66 fifteen year mortality expectation from the diagnostic test is now maybe a little farther away from the healthy cohort (eg SOA IAM tables) that I thought I was in and now a lot closer to the US average (e.g., SSA longevity tables). This means that I am not nearly inside the looming dramatic death sentence it looked like at first i.e., the "reframe" path has been from: "I am super-duper healthy and I will live forever" to "near-death-gasp!" and then back to "I guess that this isn't really the end of the world yet, is it?" 

Without further set-up:

* And you thought this blog was dead, lol...

On Time and Memory, A Chat

I am snowed in today so I had a longish and not entirely unreasonable but not entirely un-critique-able chat with ChatGPT on Time and Memory in which we include topics like snow and touch on writers like Walter Benjamin, Walker Percy, Proust, St Augustine, Borges, Kafka, CS Lewis, Camus, etc. Some of the convo felt like standard pandering, regurgitative AI but it's not terrible and Chat was a good interlocutor on a snowy locked-in contemplative afternoon. Some guys have AI girlfriends, I have an AI book-bro.

My side is in blue, Chat is in black.