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ERIC Number: EJ1346561
Record Type: Journal
Publication Date: 2022
Pages: 11
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-1052-3073
EISSN: EISSN-1947-7910
Divorce and Asset Burn: Using Retirement Planning Techniques to Model Long-Term Outcomes of Divorce
Kothakota, Michael; Lynn, Christina
Journal of Financial Counseling and Planning, v33 n1 p115-125 2022
Financial professionals involved in divorce proceedings, whether for a client or an attorney, often use software to project the ability of a dependent spouse to earn income off of her separate estate. These projections have historically relied on static inputs and use a Monte Carlo simulation to illustrate the paths a portfolio might take. Within this study, the effects on dynamic income and expense changes on outcomes were examined. A comparison was made between the traditional Monte Carlo methods and Markov Chain Monte Carlo (MCMC) methods. Results using MCMC methods more closely approximated investment return distribution, and illustrated investable assets were the primary driver of long-term success, and not items such as spousal or child support. Practical implications for financial professionals, family law attorneys, judges, and clients are discussed as well as opportunities for future research.
Association for Financial Counseling and Planning Education. 1500 West Third Avenue Suite 223, Columbus, OH 43212. Tel: 614-485-9650; Fax: 614-485-9621; Web site: https://connect.springerpub.com/content/sgrjfcp
Publication Type: Journal Articles; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A