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Did you do the 'too good to believe' OMY thing?
Old 02-09-2019, 12:04 PM   #1
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Did you do the 'too good to believe' OMY thing?

Did anyone go through (or is anyone going through) a period of OMYs because you felt the financial calculator results were too good to believe? I run multiple scenarios through FC and FRP on an almost daily basis and always come up with 95-100% results but I find myself wondering if it really is possible to retire this year and have my money last 35 years. (I'm 60 y.o. with > $1.5M) Maybe this is just part of the "normal" OMY syndrome?

Funny coincidence - As I am writing this post, I noticed that "I believe what you say to me" (Lauren Daigle) is playing in the background. Maybe I should listen to what the calculators are saying to me!
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Old 02-09-2019, 12:09 PM   #2
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As long as you are sure of your spending numbers, including the once in a while ones like:
New car, new roof, new furnace, etc...
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Old 02-09-2019, 12:16 PM   #3
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As long as you are sure of your spending numbers, including the once in a while ones like:
New car, new roof, new furnace, etc...
Yes, I've included 2 car replacements, 3 A/C replacements, 2 weddings, and 1 roof replacement over the next 35 years.
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Old 02-09-2019, 12:39 PM   #4
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Since 2014 the retirement calculators and Megacorp financial planner were saying my numbers were good to go for a comfortable retirement. I did OMY through mid-2016 and then OMY glidepath from mid-2016 to 2018 to ensure a very comfortable retirement, including getting my pension to a desirable level. Last year at 60 was the right balance of things for me to end OMY and enter the wonderful world of retirement.
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Old 02-09-2019, 12:51 PM   #5
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No. I did the too-good-to-believe-it happy dance when I left on schedule!!!

But I didn't have any calculators beyond the Trinity Paper. So for me kind of crude tools at the time. I still concluded that the situation was good enough for me to leave as planned.
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Old 02-09-2019, 01:17 PM   #6
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I'm still a good ways away, 11 years until I'm 60. It's impossible to predict what's going to happen in those 11 years. That said, it's amazing what another year does. If everything goes precisely ahead as now (it won't, of course), then at 60, FireCALC says 93% success rate. 61, 100% success rate. 67, I have 70% more to spend monthly than at 61.

It'll depend how my health is at 61 and how well I like my job, can I stay gainfully employed when older, etc. And - I can see the allure of having more available, as long as I don't put my life on hold for it.
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Old 02-10-2019, 02:44 PM   #7
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Did anyone go through (or is anyone going through) a period of OMYs because you felt the financial calculator results were too good to believe?
In the last few years leading up to my retirement, my wife and I were both certified tax preparers and we were both household budget counselors. We had been using written monthly budgets for many years at that point.

So we knew that my pension was going to be more than how much we spent in any given month.

We did not use a calculator to tell us.
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Old 02-11-2019, 08:02 AM   #8
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A timely post for us. Yes, that’s exactly how it feels. I keep looking for the error in my spreadsheet! It looks like we’re going to be able to add a nice chunk of $ to the nest egg and that, coupled with portfolio value last week, gets us to 95-98% on firecalc.

I’m wfh at 75% and will likely have the opportunity to do the same at 50% next year, which I’ll likely take advantage of. DH is looking for another job, after recently being let go, but it’s nice to know it’s not necessary.

So we’re definitely doing at least OMY, in part because it seems too good to be true, and in part because we have a young family and recently moved, so while I think I’ve budgeted correctly and added in a lot of buffer, I wouldn’t mind another year of data. If we manage to get a little more gain this year in the market, I’ll re-evaluate sticking with it next year. We need about 5% gain in the market to get to 100% in firecalc. If the mkt drops significantly during that time and we lose our 95%, I’m going to be incredibly depressed though
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Old 02-11-2019, 08:31 AM   #9
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Originally Posted by Carpediem View Post
Did anyone go through (or is anyone going through) a period of OMYs because you felt the financial calculator results were too good to believe? I run multiple scenarios through FC and FRP on an almost daily basis and always come up with 95-100% results but I find myself wondering if it really is possible to retire this year and have my money last 35 years. (I'm 60 y.o. with > $1.5M) Maybe this is just part of the "normal" OMY syndrome?

Funny coincidence - As I am writing this post, I noticed that "I believe what you say to me" (Lauren Daigle) is playing in the background. Maybe I should listen to what the calculators are saying to me!
The only thing I used was FIRECalc, but mainly it's the SWR of 4% from the Trinity study. And I can live well for significantly less than 4%. And there's SS which I can claim anytime. So, I was good to go once the kids were out of college.
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Old 02-11-2019, 08:38 AM   #10
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If the mkt drops significantly during that time and we lose our 95%, Iím going to be incredibly depressed though
I hear ya! 2018 was a cruel year as our portfolio value soared at the beginning of the year and it came crashing back down to earth toward the end of the year taking my retirement hopes and dreams with it. (A bit of exaggeration but still.) But it was a great lesson for me, who is somewhat of a newbie DIYer in the world of investing. It made me realize I needed to shore up our liquid side better and it also gave me a good chance to see what a not so great year looks like.

But in the past few weeks I've been running Firecalc and FRP practically everyday and all the results are very encouraging. Our retirement will be a 'lean retirement' and I have come to accept that since I don't have enough years left to grow it. For me it's more about a simple life and the freedom to choose my daily activities anyway.

Like you said, I keep wondering/worrying that I entered something wrong or I'm missing something. That's why I keeping thinking "this seems too good to be true.....and if it seems that way, then it probably is", which results in OMY.
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Old 02-11-2019, 08:38 AM   #11
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I strongly suggest keeping a monthly budget. There are several templates online for download that will do the job. Any good business maintains a budget. Your business in retirement is you.
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Old 02-11-2019, 08:41 AM   #12
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I strongly suggest keeping a monthly budget. There are several templates online for download that will do the job. Any good business maintains a budget. Your business in retirement is you.
Yes, I agree and we do. We are currently using Mint and for the most part, we're doing a good job of sticking to it. I've accounted for the 'lumpy items' so hopefully there wouldn't be too many surprise$.
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Old 02-11-2019, 08:47 AM   #13
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The only thing I used was FIRECalc, but mainly it's the SWR of 4% from the Trinity study. And I can live well for significantly less than 4%.
The 4% 'rule/suggestion' is another thing that gives me pause and makes me question the FC and FRP results because for the first few years, we will be over 4%. But once SS kicks in, that percentage falls to 4 or less. I realize that over a 30-35 year period the average may work out to 4% but it concerns me (needlessly more than likely) that we can't be at 4% from day one and every year afterwards. Just another thing that makes my 'OMY thinking' to kick in.
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Old 02-11-2019, 09:20 AM   #14
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The 4% 'rule/suggestion' is another thing that gives me pause and makes me question the FC and FRP results because for the first few years, we will be over 4%. But once SS kicks in, that percentage falls to 4 or less. I realize that over a 30-35 year period the average may work out to 4% but it concerns me (needlessly more than likely) that we can't be at 4% from day one and every year afterwards. Just another thing that makes my 'OMY thinking' to kick in.
Yes, we're in a similar boat. We have young kids, so our spend is higher the first 15 yrs or so and then anticipated to go down as they launch and we downsize. So lots of potential change and lots of fuzzy estimates based on imperfect information...
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Old 02-11-2019, 09:41 AM   #15
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The 4% 'rule/suggestion' is another thing that gives me pause and makes me question the FC and FRP results because for the first few years, we will be over 4%. But once SS kicks in, that percentage falls to 4 or less. I realize that over a 30-35 year period the average may work out to 4% but it concerns me (needlessly more than likely) that we can't be at 4% from day one and every year afterwards. Just another thing that makes my 'OMY thinking' to kick in.
That is the advantage of using FIRECalc and other retirement calculators that model SS and pensions. The 4% rule does not consider other income, it just assumes that you are living solely off your portfolio. So what you are seeing is normal. In my FIRECalc model I target a 4% WR now, but that drops to less than 3% when SS kicks in.

IMO, as long as your "over 4%" is not way over and you are not retiring very early, if FC says you are good to go then OMY is not necessary. Of course that assumes you have a robust model for your spending.
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Old 02-11-2019, 10:23 AM   #16
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I did the OMY thing because:

- I wanted to give myself a slightly larger safety margin
- Even though I’d been very generous with my budgeting, I wanted an extra discressionary fund for unplanned travel, expenses, etc.
- I didn’t have any sort of plan for “what’s next”
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Old 02-11-2019, 10:29 AM   #17
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If anything, I did "one less year". When I found FIRECalc I had already retired, and my first run of the numbers showed a portfolio survival rate below my comfort level. Had I been working, that might have prompted me to stay with the job for another year or two. Thank goodness I didn't see it then.
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Old 02-11-2019, 10:37 AM   #18
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If anything, I did "one less year". When I found FIRECalc I had already retired, and my first run of the numbers showed a portfolio survival rate below my comfort level. Had I been working, that might have prompted me to stay with the job for another year or two. Thank goodness I didn't see it then.
Hahaha, love it! Well done.
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Old 02-11-2019, 10:51 AM   #19
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The 4% 'rule/suggestion' is another thing that gives me pause and makes me question the FC and FRP results because for the first few years, we will be over 4%. But once SS kicks in, that percentage falls to 4 or less. I realize that over a 30-35 year period the average may work out to 4% but it concerns me (needlessly more than likely) that we can't be at 4% from day one and every year afterwards. Just another thing that makes my 'OMY thinking' to kick in.
As you might know, Firecalc, Fidelity, etc takes all the income into account.
My WR is 3%. I have been retired 19 months and still run the calculators monthly.
As of now, we might be over 4% for ~ 6 years then under 2.5% at 70 yo when SS kicks in.
I trust the calculators, I just do.
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Old 02-11-2019, 11:20 AM   #20
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I trust the calculators, I just do.
^^^ I agree! I just hope I can trust my usage of them.

Honestly, I'm getting more and more comfortable and confident in the results. I just did a couple more FC runs - (1) constant spending of $95k for 30 years - results 94.1%, and (2) manual spending model for 30 years - results 100%. We are 60 and 59 and have never spent more than maybe $80k.
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