Inputs (defaults in parens):
- F = An investment fund (SPX, or 70/30 split, or, ...)
- Y = years until retirement (40)
- S = starting year when you make the decision between strategies. At least Y years in the past since we want to draw on historical data. (now - Y)
- T = total starting capital. This should be the amount of accumulated lifetime savings you have in non-retirement accounts, and you need to decide what strategy to use on it. ($100K)
- E = emergency fund value. Sources suggest 3-6 months living expenses. ($20K)
- P = probability that you need to access $E in an emergency, some time between S and S+Y. (10%???)
- X = the year you need access to $E, in P*100% of universes (see below)
- strategy = { invest, emergency fund }
- invest = put all of T into F