// Method used to calculate the financial goal.
public static string CalculateGoal(double withdrawlRate, double taxRate, decimal currentInvestments, decimal retirementSpeding, decimal initialSavings, double returns, double savings, bool pegToInflation, double inflation)
{
double time = 0;
decimal goal = currentInvestments;
decimal fix = (decimal)((1 + taxRate) / withdrawlRate);
decimal adjustedRetirementSpeding = retirementSpeding;
if (!pegToInflation)
{
goal = retirementSpeding * fix;
return(goal.ToString("C0"));
}
while (goal / fix < adjustedRetirementSpeding)
{
goal = currentInvestments;
if (savings > 0)
{
goal += FinanceCalculations.FutureVariableAnnuityValue(initialSavings, time, returns, savings, 365, 0, recurringInvestingFrequency);
}
else
{
goal += FinanceCalculations.FutureFixedAnnuityValue(initialSavings, time, returns, 365, 0, recurringInvestingFrequency);
}
adjustedRetirementSpeding = FinanceCalculations.FutureValue(retirementSpeding, time, inflation);
time++;
}
return(goal.ToString("C0"));
}
// Method used to find the future value of the repeated payments.
private decimal CalculateAnnuity(double length, double rate)
{
int frequency = int.Parse(txtCompoundingFrequency.Text);
decimal payment = decimal.Parse(txtAnnuityPayment.Text, NumberStyles.Currency);
int immediately = chkPaymentAt.Checked ? 1 : 0;
int paymentFrequency = int.Parse(txtPaymentFrequency.Text);
double growth = double.Parse(txtPaymentGrowth.Text) / 100;
if (growth == 0)
{
return(FinanceCalculations.FutureFixedAnnuityValue(payment, length, rate, frequency, immediately, paymentFrequency));
}
else
{
return(FinanceCalculations.FutureVariableAnnuityValue(payment, length, rate, growth, frequency, immediately, paymentFrequency));
}
}
// An interative function that finds the rate to meet the goal within a given time.
public static double GetRateOfGrowth(decimal goal, decimal startingBal, decimal initialSavings, double growth, double time)
{
decimal bal = startingBal;
double rate = 0;
while (bal < goal)
{
bal = FinanceCalculations.FutureValue(startingBal, time, rate, 365);
if (growth > 0)
{
bal += FinanceCalculations.FutureVariableAnnuityValue(initialSavings, time, rate, growth, 365, 0, recurringInvestingFrequency);
}
else
{
bal += FinanceCalculations.FutureFixedAnnuityValue(initialSavings, time, rate, 365, 0, recurringInvestingFrequency);
}
rate += RATE_STEP;
}
return(rate);
}
// An interative function that finds the time to meet the goal.
public static double GetTimeToGoal(decimal goal, decimal principal, decimal payment, double growth, double savingsGrowth)
{
double time = 0;
decimal bal = 0;
while (bal < goal)
{
bal = 0;
bal += FinanceCalculations.FutureValue(principal, time, growth);
if (savingsGrowth > 0)
{
bal += FinanceCalculations.FutureVariableAnnuityValue(payment, time, growth, savingsGrowth, 365, 0, recurringInvestingFrequency);
}
else
{
bal += FinanceCalculations.FutureFixedAnnuityValue(payment, time, growth, 365, 0, recurringInvestingFrequency);
}
time += TIME_STEP;
}
return(time);
}
private void GenerateReturns()
{
// Set parameters
bool incomeGrowthExcessOfInflation = chkInflationIncomeGrowthPeg.Checked;
int projectionType = cboProjection.SelectedIndex;
int paymentFrequency = Investing.recurringInvestingFrequency;
double bondAllocation = double.Parse(txtBondFraction.Text) / 100;
double stockAllocation = double.Parse(txtStockFraction.Text) / 100;
double inflationMean = double.Parse(txtInflation.Text) / 100;
double incomeGrowthRate = double.Parse(txtIncomeGrowth.Text) / 100 + (incomeGrowthExcessOfInflation ? inflationMean : 0);
double savingsGrowthRateFraction = double.Parse(txtSavingFractionGrowth.Text) / 100;
double bReturns = double.Parse(txtBondReturns.Text) / 100;
double sReturns = double.Parse(txtStockReturns.Text) / 100;
double savingsGrowthRate = savingsGrowthRateFraction * incomeGrowthRate;
double time = 0;
decimal currentInvestments = decimal.Parse(txtPrincipal.Text, NumberStyles.Currency);
decimal initialSavings = decimal.Parse(txtIncome.Text, NumberStyles.Currency) - decimal.Parse(txtSpending.Text, NumberStyles.Currency);
decimal goal = decimal.Parse(txtSavingsGoal.Text, NumberStyles.Currency);
carcInvestment.Series.Clear();
// 0 = fixed returns, 1 = monte-carlo; TODO: 2 = historical cycles
if (projectionType == 0)
{
// Fixed Returns
double averageReturn = Investing.PortfolioWeightedAverageReturn(bondAllocation, stockAllocation, bReturns, sReturns);
double timeToRetire = Investing.GetTimeToGoal(goal, currentInvestments, initialSavings, averageReturn, savingsGrowthRate);
decimal[] total = new decimal[(int)timeToRetire + 5];
decimal[] returns = new decimal[(int)timeToRetire + 5];
decimal[] principal = new decimal[(int)timeToRetire + 5];
// Generate return arrays
for (int i = 0; i < (int)timeToRetire + 5; i++)
{
principal[i] += currentInvestments;
total[i] += FinanceCalculations.FutureValue(currentInvestments, i, averageReturn, 365);
if (savingsGrowthRate > 0)
{
total[i] += FinanceCalculations.FutureVariableAnnuityValue(initialSavings, i, averageReturn, savingsGrowthRate, 365, 0, paymentFrequency);
principal[i] += FinanceCalculations.FutureVariableAnnuityValue(initialSavings, i, 0, savingsGrowthRate, 365, 0, paymentFrequency);
}
else
{
total[i] += FinanceCalculations.FutureFixedAnnuityValue(initialSavings, i, averageReturn, 365, 0, paymentFrequency);
principal[i] += initialSavings * i;
}
returns[i] = total[i] - principal[i];
}
GenerateChart(total, "Total");
GenerateChart(returns, "Return");
GenerateChart(principal, "Principal", goal, timeToRetire);
time = timeToRetire;
}
else if (projectionType == 1)
{
// Monte-Carlo
int simulations = 50000;
//double inflationVolatility = 0.0119;
double stockVolatility = 0.5;
double bondVolatility = 0.03;
double[] percentileList = { 0.9, 0.75, 0.5, 0.25, 0.1 };
double[] lengths = new double[simulations];
double[] percentileLengths = new double[percentileList.Length];
double[] averageRatesOfGrowth = new double[percentileList.Length];
decimal[][] percentileReturns = new decimal[percentileList.Length][];
//Run the simulations to find lengths
for (int i = 0; i < simulations; i++)
{
decimal x = currentInvestments;
Random r = new Random(DateTime.Now.Ticks.GetHashCode());
lengths[i] = 0;
while (x < goal)
{
// Randomly generated return of the portfolio
double pReturn = Investing.CalculateRandomPortfolioReturn(bReturns, bondVolatility, bondAllocation, sReturns, stockVolatility, stockAllocation, r);
// Caluculate portfolio value at the end of the year
x *= 1 + (decimal)pReturn;
// Add savings to portfolio
if (savingsGrowthRate > 0)
{
x += FinanceCalculations.FutureValue(initialSavings, lengths[i], savingsGrowthRate, 1);
}
else
{
x += initialSavings * i;
}
lengths[i]++;
}
}
for (int i = 0; i < percentileList.Length; i++)
{
// Get length percentiles
percentileLengths[i] = FinanceCalculations.Percentile(lengths, percentileList[i]);
// Find equivelant growth rate
averageRatesOfGrowth[i] = Investing.GetRateOfGrowth(goal, currentInvestments, initialSavings, savingsGrowthRate, percentileLengths[i]);
// Initialize the array with the 90th percentile in length + 2
percentileReturns[i] = new decimal[(int)percentileLengths[0] + 2];
//Calculate return array
for (int j = 0; j < (int)percentileLengths[0] + 2; j++)
{
percentileReturns[i][j] += FinanceCalculations.FutureValue(currentInvestments, j, averageRatesOfGrowth[i], 365);
if (savingsGrowthRate > 0)
{
percentileReturns[i][j] += FinanceCalculations.FutureVariableAnnuityValue(initialSavings, j, averageRatesOfGrowth[i], savingsGrowthRate, 365, 0, paymentFrequency);
}
else
{
percentileReturns[i][j] += FinanceCalculations.FutureFixedAnnuityValue(initialSavings, j, averageRatesOfGrowth[i], 365, 0, paymentFrequency);
}
}
}
for (int i = 0; i < percentileLengths.Length; i++)
{
int k = percentileList.Length - i - 1;
GenerateChart(percentileReturns[k], (100 * percentileList[i]).ToString("0") + "th Percentile Returns", goal, percentileLengths[2]);
}
time = percentileLengths[2];
}
PrintResults(time);
}