2017 Results for CPI, Stocks, Bonds - Calculators Updated
- January 19, 2018
- by Wealth Meta Admin
Our calculators have been updated with 2017 data for CPI, S&P 500, bond, and cash returns.
2017 raw numbers:
- The CPI (consumer price index) increased by 2.1%.
- The S&P 500 had a 21.64% return.
- The 90-day T bill had a 1.39% return (which we consider as the cash return in our retirement calculators).
- 10 year Treasury Bonds had a 2.80% return.
2017 was a great year for US stocks. The 90-day T Bill return ticked above 1% for the first time since 2008. Bond returns are tame, likely because of small rate hikes by the fed and the expectation there are more to come.
Our retirement calculators use backtesting based on historical data sine 1928. Even though 2017 was an excellent year in term of stock returns, it really didn't move the overall needle that much. When running a Nest Egg Simulation with default inputs the average resulting balance only went up by $10k (a piddly 0.19%). The default settings are to retire with $1M (invested 70% stocks, 30% bonds), with an initial withdrawal amount of $40,000 that gets adjusted by the CPI every year, and to let it run for 30 years. This is yet another piece of evidence that supports the idea of long term investing.
Average Resulting Balance $5.20M (2016 only)
Average Resulting Balance $5.30M (with 2017 update)
Other results are exactly the same:
Simulations Ending Above Zero (money left over) 98.9%
Simulations Ending Below Zero (money ran out early) 1.1%
Simulation Low -$205,544
Simulation High $16.08M
- CPI data https://fred.stlouisfed.org.
- Stock market, bonds, and cash returns are from Professor Damodaran's Historical Returns spreadsheet.