IPS - Time Horizon growth, stages, taking

spartanag07

Question:
John is 30 retiring at 60 (Life expectancy 90)
at 50 taking care of parents for 10 years.
Time Horizon is
A. Multi Stage
-3 stages; one 30 to 50, two 50-60, three 60-90 (two in pre retirement and one in retirement)
OR
b. Two stages
Retirement and Pre retirement???
Also if bequest/trust growth third stage of post retirement???

BC_MBA_student

The sense I get is that it’s acceptable to divide further into sort of “sub stages” (ie 3 stages as in your example) if there is a material change that would cause a revisit to the IPS. But I *always* have issues with this too.

Siddimaula

I would say A but I guess it would depend on what “taking care of parents” meant. Are they moving in with the guy (nothing much changes) or is he sending them $100K per year (big change)? I typically split time horizons where large changes in cash flow (in or out) occur.

mfleming1983

i say multi stage 3 in total, 4 if there is a bequest/estate commitment,

Zestt

I would go for 3 because you have different spending needs

dontknow1987

Three to be safe, but it is dependent on the PORTFOLIO IMPLICATIONS of looking after the parents. If looking after parents will not impact portfolio, then two.