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5 different calculators
Old 07-26-2014, 12:27 PM   #1
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5 different calculators

I ran my numbers recently through many of the calculators that other ER members have used.

Tried to use the same criteria but they don't all allow for the same inputs.

One thing common was 3.5% inflation, being conservative.

All of them allowed me to set the budget or the amount of spending I would like. With Quicken Lifetime Planner, I adjusted the post-tax dollars until it was successful but then add back in the taxes to derive the withdrawal rate.

FireCalc - Unless I'm mistaken, it doesn't seem to account for SS or RMDs or taxes in the spreadsheet that I exported from the results. There are no categories for them, just columns for beginning and ending balances, inflation adjusted and non-inflation adjusted, amounts in various categories and inflation-adjusted withdrawals.

At the end of it, at year 40, the balance would be over 12X times what I start with, when simulated for the period 1973-2012.

I set the beginning withdrawal amount at approximately 2.63%.

Quicken Lifetime Planner - This allows for more inputs than the others so it makes it difficult to compare the results.

I set 3.5% inflation, 4% ROI and 17% post-retirement tax rate. I wasn't sure about the last one but my last income tax return had an effective tax rate of 22%.

Like I said, I played around with different post-tax dollars before it succeeded, though at the end, the balance is almost depleted.

I started out with a higher starting balance than FireCalc (by about 5-7%) but it results in a very low balance at the end of 40 years.

The withdrawal rate for the first year, if I add the post-tax dollars plus the taxes and divide by the starting balance, turns out to be 2.55% starting in 2015.

It may be that I used very conservative assumptions, though the difference in results is stark, especially considering that FireCalc doesn't show Social Security or RMDs reducing withdrawals. Since it also doesn't explicitly track taxes, it may be overestimating the value of the assets.


Fidelity Retirement Income Planner - I used 3.5% inflation for a roughly 50/50 portfolio and set it for 95% confidence level, the highest you can select.

I chose a higher withdrawal amount than the others, actually 10% higher, on a lower starting portfolio balance. I chose to take Social Security at age 62 and it shows the withdrawal percentage dipping for a year or two before it goes up.

I didn't break out my retirement assets by taxable and retirement accounts. It imports the few funds I have in my Fidelity account, which are taxable and I enter a lump sum. So it doesn't show anything in the MRD columns at all.

At year 40 there is still a sizable balance left but the withdrawal amounts don't account for taxes. Withdrawal rate range from 4.13% to 42% in year 40.


cFireSim - 3.5% inflation, selected 2.86% beginning withdrawal percentage. It succeeded in 105 cycles without any failures.

Like FireCalc, I exported the CSV and again, there are no columns for social security, RMDs or taxes. The export covers 1956-1995 and at year 40, the ending balance is over 8x the starting balance. Even the beginning and ending inflation-adjusted balance ratio is almost 2 to 1.


i-Orp - 3.5% inflation, Social Security at 62, ROI at 4% after retirement and 7% for tax-deferred account (the default). Left the Fixed income yield pre-retirement at 3% and set the post-retirement yield at 2%.

Left the after-tax account federal tax rate at 15% which is the default. Entered 22% for the current federal tax rate and 9% for state tax rate (CA).

Unlike the others, i-Orp generates the withdrawal amount. Probably because I left the amount of "Desired estate" at zero or blank, it calculated how much I could withdrawal to exhaust the portfolio at the end of year 40?

Ending balance is very minimal, like $41k, which is like 10% of the withdrawal amount in year 40.

The starting withdrawal is 2.87% of the starting balance.


So QLP and i-Orp shows exhausting the portfolio in 40 years, starting at roughly the same withdrawal amount.

FireCalc and cFiresim shows leaving a lot of money, several times what I would start with, though they're not including taxes.

FRIP is somewhere in between, though starting at a 10% higher withdrawal amount.

It's hard to tell whether to feel assured or uncertain, given the divergent results (though all indicate success and in all cases, I started with less money than I actually had, ranging from 5-15% less than my current assets).
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Old 07-26-2014, 01:49 PM   #2
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FireCalc does indeed take into account SS, both for you and your spouse. I think you may be having trouble finding the tabs for managing the details. I did too. Look at the thin line of options starting with 'Start Here' at the top of the page. (They are supposed to be in a horizontal line. Copy and paste did not work real good.) Go to 'Other income/Spending'.
It does not take into account RMDs or taxes. Why should it?

It shows the survivability of a portfolio with different rates of withdrawal/consumption/destruction of capital. Where the money goes (buy a yacht, pay taxes) is your problem. If money is forceably withdrawn by the MRD schedule, you don't have to spend it. You can re-invest it in exactly the same assets it came from in the IRA or 401K and it will still be earning.
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Old 07-26-2014, 02:14 PM   #3
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cFireSim also allows you to input Social Security. Just scroll down a bit to the Extra Income panel. Input your anticipated SS income, year it starts. (And do the same if you have a spouse to include in the projection.)
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Old 07-26-2014, 02:32 PM   #4
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Pretty sure I entered social security info in both, the estimated benefits.

What I'm saying is the exported CSV doesn't indicate it in any way.
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Old 07-26-2014, 02:40 PM   #5
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I have used all of the ones you mentioned. Another one I like is this

Flexible Retirement Planner. It is a downloadable program. And very flexible and powerful.

You can add Social Security at the age you want. And extra expenses when you want. Of just use the defaults.
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Old 07-26-2014, 03:02 PM   #6
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Quote:
Originally Posted by explanade View Post
Pretty sure I entered social security info in both, the estimated benefits.

What I'm saying is the exported CSV doesn't indicate it in any way.
Since what firecalc does is to take your spending subtract your Socal Security and pension, and get the amount your investments must provide. Then it runs the gain loss for the year being tested, and does the same for the next year. If you select the second spread sheet option on the results page you see inputs for a set of years. It does include social security. as a column on the spread sheet.
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Old 07-26-2014, 03:05 PM   #7
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Quote:
Originally Posted by explanade View Post
Pretty sure I entered social security info in both, the estimated benefits.

What I'm saying is the exported CSV doesn't indicate it in any way.
Sorry - misunderstood from your original post. cFireSim's creator is very responsive to feedback. I suggest you post your results and questions in the forum.
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Old 07-26-2014, 05:31 PM   #8
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Quote:
Originally Posted by explanade View Post
Pretty sure I entered social security info in both, the estimated benefits.

What I'm saying is the exported CSV doesn't indicate it in any way.
It does, indirectly. FIRECalc applies the spending first against income, such as SS and pension, then subtracts what's left from the portfolio. What you are presented with is the net portfolio remaining after spending.
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Old 07-26-2014, 07:59 PM   #9
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17% tax rate sounds high. Take last year's tax return and take out earnings and add any other applicable adjustments to see what you're retirement tax rate is.
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Old 07-27-2014, 07:53 PM   #10
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Fidelity retirement income planner does take taxes into consideration. Also, you should fill out the budget section as it uses 7% inflation for health care. When I filled out the budget, I went from funds left over to a shortfall. If you put all of your assets in, it will take after tax income first. I was very impressed with it. There is a section that explains methodology in the upper right hand section of most pages.
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Old 07-27-2014, 11:15 PM   #11
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I entered lump sums for "essential" and "discretionary" expenses in Fidelity Retirement Income Planner, not really breaking it out into separate categories.

The "essential" figure represents more of a desired amount of spending than the absolute expenses I need. It's almost double my current (un-retired) expenses.

Do you benchmark the "Beginning Assets" values that FRIP calculated for each year against your actual asset values?
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Old 07-28-2014, 05:57 AM   #12
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Yes, the FRIP matches my assets. All of my assets are in ira's, mutual funds and cd's. I used "full view" to add them to my fidelity account. I then selected the ones I wanted to use in my FRIP including my wifes ira. In my budget I also segmented my health insurance and vacation expenses. I am using "private" health care costs the first five years and medicare, medigap the remaining years. Fidelity will estimate the medicare/medigap for you if you choose. The FRIP can also detail by year your balance, expenses, income and taxes for you. I later created a spreadsheet including the Fidelity methodology to compare and my numbers come close to those of the FRIP. I am very impressed with how many variables the FRIP accounts for.
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Old 07-28-2014, 09:42 AM   #13
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It pads quite a lot to Total Expenses to arrive at the Total Withdrawals figure.

Good to hear it's on track for you.
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