parameters.py

   1 import constants
   2 import utils
   3 from tax_brackets import tax_brackets
   4
   5 class parameters(object):
   6     """A container to hold the initial states of several simulation
   7        parameters.  Play with them as you see fit and see what happens."""
   8
   9     def __init__(self):
  10         self.with_default_values()
  11
  12     def with_default_values(self):
  13         # Annual expenses in USD at the start of the simulation.  This
  14         # will be adjusted upwards with inflation_multiplier every year.
  15         self.initial_annual_expenses = 144300
  16
  17         # The average US inflation rate during the simulation.  The
  18         # Fed's target rate is 2.0% as of 2020.  The long term observed
  19         # average historical inflation rate in the US is 2.1%.
  20         #
  21         # Note this is a multiplier... so 1.0 would be no inflation,
  22         # 1.21 is 2.1% inflation, 0.9 is deflation, etc...
  23         self.inflation_multiplier = 1.03
  24
  25         # We want to be able to model social security payments not
  26         # keeping pace with inflation.  Like the inflation_multiplier
  27         # above, this is a multiplier.  It affect the magnitide of
  28         # social security payments year over year.
  29         self.social_security_multiplier = 1.02
  30
  31         # This is the average investment return rate.  Asset allocation has
  32         # a large effect on this as does the overall economy.  That said,
  33         # the US stock market has returned 10%/year over a large enough
  34         # time window.  Our investments at Fidelity have returned 6.91%
  35         # in the lifetime they have been there.  The expected return of a
  36         # 50/50 stock/bond investment mix based on historical data is 8.3%.
  37         self.investment_multiplier = 1.04
  38
  39         # The age at which each person will take social security
  40         # benefits in this simulation and how much she will get the
  41         # first year.  Note, this benefit size increases year over
  42         # year at social_security_multiplier.  This is what the social
  43         # security website estimates if we both earn $0 from 2020 on:
  44         #
  45         #     Lynn's benefits:              Scott's benefits:
  46         #      age 62 - $21,120              age 62 - $21,420
  47         #      age 67 - $30,000              age 67 - $30,420
  48         #      age 70 - $37,200              age 70 - $37,728
  49         #
  50         self.social_security_age = [ 0, 62, 70 ]
  51         self.initial_social_security_dollars = [ 0, 15000, 25000 ]
  52
  53         # Tax details... the standard deduction amount and tax
  54         # brackets for ordinary income and long term capital gains.
  55         self.federal_standard_deduction_dollars = 24800
  56         self.federal_ordinary_income_tax_brackets = tax_brackets(
  57             constants.PESSIMISTIC_FEDERAL_INCOME_TAX_BRACKETS)
  58         self.federal_dividends_and_long_term_gains_brackets = tax_brackets(
  59             constants.CURRENT_LONG_TERM_GAIN_FEDERAL_TAX_BRACKETS)
  60         return self
  61
  62     def with_initial_annual_expenses(self, expenses):
  63         self.initial_annual_expenses = expenses
  64         return self
  65
  66     def get_initial_annual_expenses(self):
  67         return self.initial_annual_expenses
  68
  69     def with_average_inflation_multiplier(self, multiplier):
  70         self.inflation_multiplier = multiplier
  71         return self
  72
  73     def get_average_inflation_multiplier(self):
  74         return self.inflation_multiplier
  75
  76     def with_average_social_security_multiplier(self, multiplier):
  77         self.social_security_multiplier = multiplier
  78         return self
  79
  80     def get_average_social_security_multiplier(self):
  81         return self.social_security_multiplier
  82
  83     def with_average_investment_return_multiplier(self, multiplier):
  84         self.investment_multiplier = multiplier
  85         return self
  86
  87     def get_average_investment_return_multiplier(self):
  88         return self.investment_multiplier
  89
  90     def with_initial_social_security_age_and_benefits(self,
  91                                                       person,
  92                                                       age,
  93                                                       amount):
  94         self.social_security_age[person] = age
  95         self.initial_social_security_dollars[person] = amount
  96         return self
  97
  98     def get_initial_social_security_age(self, person):
  99         return self.social_security_age[person]
 100
 101     def get_initial_social_security_benefit(self, person):
 102         return self.initial_social_security_dollars[person]
 103
 104     def with_federal_standard_deduction(self, deduction):
 105         self.federal_standard_deduction_dollars = deduction
 106         return self
 107
 108     def get_federal_standard_deduction(self):
 109         return self.federal_standard_deduction_dollars
 110
 111     def with_federal_ordinary_income_tax_brackets(self, brackets):
 112         self.federal_ordinary_income_tax_brackets = brackets
 113         return self
 114
 115     def get_federal_ordinary_income_tax_brackets(self):
 116         return self.federal_ordinary_income_tax_brackets
 117
 118     def with_federal_dividends_and_long_term_gains_income_tax_brackets(self,
 119                                                                        brackets):
 120         self.federal_dividends_and_long_term_gains_brackets = brackets;
 121         return self
 122
 123     def get_federal_dividends_and_long_term_gains_income_tax_brackets(self):
 124         return self.federal_dividends_and_long_term_gains_brackets
 125
 126     def dump(self):
 127         print "SIMULATION PARAMETERS"
 128         print "  {:<50}: {:>14}".format("Initial year annual expenses",
 129                                         utils.format_money(self.initial_annual_expenses))
 130         print "  {:<50}: {:>14}".format("Annual inflation rate",
 131                                         utils.format_rate(self.inflation_multiplier))
 132         print "  {:<50}: {:>14}".format("Average annual investment return rate",
 133                                         utils.format_rate(self.investment_multiplier))
 134         print "  {:<50}: {:>14}".format("Annual social security benefit increase rate",
 135                                         utils.format_rate(self.social_security_multiplier))
 136         print "  {:<50}: {:>14}".format("Age at which Lynn takes social security",
 137                                         self.social_security_age[constants.LYNN])
 138         print "  {:<50}: {:>14}".format("Lynn's first year social security benefit",
 139                                         utils.format_money(self.initial_social_security_dollars[constants.LYNN]))
 140         print "  {:<50}: {:>14}".format("Age at which Scott takes social security",
 141                                         self.social_security_age[constants.SCOTT])
 142         print "  {:<50}: {:>14}".format("Scott's first year social security benefit",
 143                                         utils.format_money(self.initial_social_security_dollars[constants.SCOTT]))
 144         print "  Federal tax brackets ["
 145         self.federal_ordinary_income_tax_brackets.dump()
 146         print "  ]"
 147
 148         print "  Federal dividend and long term gain brackets ["
 149         self.federal_dividends_and_long_term_gains_brackets.dump()
 150         print "  ]"
 151         print "  We assume Roth money continues to be available tax-free."