Today I'm happy to announce parameter SCANS for the TIME MACHINE.
To explore the effects of systematically changing one or more of the many parameters you have entered in your scenario for the TIME MACHINE, we now allow SCANS. In addition to the 6 saved runs that you can have at a time, we also allow you to save up to 6 SCANS at a time. Each scan can contain up to 101 runs.
In a scan, you can vary most values for most of the entities you have entered in your scenario. You will first select the type of entity from a drop-down list (e.g., EXPENSES, INCOMES, INVESTMENTS, etc.), and then select the entity (e.g., the EXPENSE) and the kind of values that apply to that entity (amount, percentage, date, etc.). You then enter a starting value, an increment value (which can be negative for a decrement), and a stop value. For dates, the increment is in full years. A TIME MACHINE run will be done for each value of that parameter, keeping everything else constant in your scenario.
Because different parameters often move in tandem, you can add additional parameters in exactly the same way. Although there is no limit to the number of parameters you can add, there is a limit to the total number of runs (100) we allow per SCAN. Each parameter is linked to the others, and the final number of runs will also be determined by the parameter with the fewest scan values. You will be able to see a table of the values that will be used for each run to confirm that you have set up the SCAN as you want before actually running it. The last run that will be done is for your current unmodified scenario.
For example: Say you have quotes for different term life insurance values. You can get a $100,000 death benefit for a $1,000/year premium, and every additional $100,000 of coverage costs $1,000/year. To set up this SCAN, you would select INSURANCE from the first dropdown, then select "death benefit" from the second. To explore a death benefit from $100,000 to $1,000,000 in $100,000 increments, the starting value would be $100,000, the increment $100,000, and the stop value $1,000,000. Once those are entered you can `Save and add a parameter'.
Again you would select INSURANCE from the first dropdown, then select "premium" from the second. The starting value would then be $1000 and the increment $1000. The stop value for a million dollars of coverage would be $10,000 in this case. If you enter a stop value less than that, say $8,000, the last run would be for $800,000 of coverage not a million. If you enter a stop value that is higher than $10,000, the runs will still stop when the stop on the death benefit is reached. In other words, the first of the stop conditions to be reached ends the run.
Here’s another more complicated example: Say you just received your statement from your defined benefit pension plan. It shows you how much you will get in pension income and bridge benefits if you start your pension at 55, 60, 65, and 70. You are considering when to retire and wish to explore those options. You would select the PROFILE table, and then set the start date of retirement. Set a starting date at your retirement date, increment 5 as dates are incremented in years, and stop value of your retirement date at age 70. Because you have linked INCOMES, EXPENSES, and SAVINGS to your retirement date, the TIME MACHINE will automatically also adjust the start/end dates for those entries as well. You would then add the parameter for the table INCOMES and select the pension you've entered. You would add the value for the pension from your statement at 55, then for the increment enter the difference between the value at 60 and 55. You can add a very high value for the stop as the runs will stop after 4 runs anyway due to the date of retirement parameter. The pension may not increase linearly, however, so the increment may only be approximate in the SCAN; you can always run another TIME MACHINE with a more accurate value once you have narrowed down your options. You can then add another parameter for the bridge pension in the same way as for the pension. The TIME MACHINE will not pay out a bridge pension after 65 anyway, so again you can set a very high number for the stop value.
When the runs are finished, you will see a table with some stats (total taxes paid, legacy, to estate, etc.) for each of the runs in a given SCAN, similar to your list of saved runs. You will be able to view each one and compare them pairwise. Just like saved runs, you can restore its scenario. SCAN runs have an automatic description added to them that shows the values of the parameters used in that run. Its name is just the TIME MACHINE run number. You can modify the name and the description if you want.
SCANS are a little dangerous because there is little or no checking of your inputs at this level. You may be instructing the TIME MACHINE into a parameter space that is disallowed for whatever reason (a loan can't be amortized for example), and it may even crash. If there is a crash, the scans should continue running, but you won't get the results of any run that crashed.
Your list of saved runs now has an extra table with the list of SCANS. You can click on a scan to view it. SCANS have an automatic description added with the inputs that you entered for that scan. You can add additional information in the description. Changing the description will not change the parameters, you need to set up a new scan to do that. For advisors, note that SCANS and their results will be visible to clients by default. You can remove that permission for any scan by unchecking `Allow client to view results' where you go to edit the SCAN name and description.
You can re-run a SCAN on your current scenario. The SCAN's previous runs will be deleted and replaced with the new runs. For example, you could change the age of death in your scenario, and re-run the life insurance scan for that age of death. Or you can just re-run a scan in a few months with updated values of your accounts and other entities. To avoid crashes, make sure the parameters of the scan are still applicable to the updated scenario.
This feature is included with any subscription. Let me know if you have any questions or feedback.
Enjoy!