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technique
Fundedness Ratio
1 creator use or recommend it
▲ 1 active in the last 90 days
1 use
Last discussed Sep 29, 2026
A retirement planning metric comparing the present value of cash flows a client needs to the current value of their assets, targeting a ratio of 110% or higher to confirm plan adequacy.
Recently discussed in
Ep 509: Systematizing Your Differentiated Service As A (True) Retirement Expert While Scaling To ...
Dana Anspach · Sep 29, 2026
What creators say
DA
Dana Anspach
Uses it
“We're taking the present value of the cash flows that the client needs and comparing that to the current value of their assets to get a ratio that we want to see at 110% or higher. What we love about this metric is I assume the rate of return on all of the accounts is identical. And so what I can do is simply compare withdrawal strategies, compare Roth conversions — and everything factors into that fundedness number.”
How Dana uses Fundedness Ratio Hide
- Uses it for
- Second retirement readiness test at Strategy Two meeting — used to compare withdrawal strategies, Roth conversions, and Social Security claiming scenarios on an apples-to-apples basis
- Likes
- Encompasses all variables into one number regardless of portfolio; allows direct comparison of different strategies without return assumption bias; present value framing aligns with actual retirement cash flow needs
- Compared with
- Used alongside Monte Carlo and historical audit; preferred over Monte Carlo for scenario comparison because it isolates strategy differences from return assumptions
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