Another take on FireCalc

[Geld ist Freiheit]

Found this on Reddit:

Will Your Money Last If You Retire Early? Visualizing Longevity Risk - Engaging Data

From what I’ve read so far, it crunches the numbers in a similar fashion but includes likelihood of death in the mix.

From the website:

Probabilities based on historical cycles

The graph shows the likelihood of your balance being at different levels during each year of your retirement (and compares it to the probability of dying during this time). Red indicates failure (i.e. you’ve run out of money) and green indicates success (i.e. you haven’t run out of money). The probabilities are calculated based upon looking at stock, bond and cash returns from historical cycles between 1871 and 2016.

 

[Dtail]

So if I am using the chart correctly, on a 50/50 portfolio it is stating that one needs a WR of 3% in order to have 100% chance of success.

 

[badatmath]

So I need to stop putting 95 as the end of my planning age in an attempt to be conservative. . . DEAD looks like a very big section on the chart.

 

[Geld ist Freiheit]

So I need to stop putting 95 as the end of my planning age in an attempt to be conservative. . . DEAD looks like a very big section on the chart.

Exactly. I’m gunning for a 90%+ success rate at age 85 but the chart shows there’s a 65% chance I’ll be dead.

In other words, odds are better than 50/50 that I’ll won’t live long enough to see if I was right.

 

[Geld ist Freiheit]

For any reasonable swipe at retirement, you’re much more likely to die than run out of money.

Also, if you put in an older retirement age (e.g. 65 instead of 55) the “wedge of death” gets awfully big, awfully fast.
Sort of puts things in perspective.

 

[samclem]

I think something is way off with the calculator linked in the OP.


It says that a 50 year old planning on a 50 year retirement has a 99% chance of being dead at age 100.

This chart in this article, based on UK stats says a man born in 1968 (i.e. 50 years old) has about a 11% chance of living to 100, a woman has about an 17% chance. UK longevity is slightly longer than US longevity, but only slightly.

Here's a calculator from the UK Office of National Statistics: 50 YO male has a 10.8% chance of living to 100. A 50YO woman has a 15.2% chance. That's a lot higher than the 1% and 2% (respectively) given by the calculator in the OP.


The numbers in this piece from The Guardian look about the same.

And, if we are planning for retirement income for a couple, then we'd need to plan for their joint life expectancy, which will be longer still.

So, something's not right.

 

[Independent]

Yes, the thing that's not right is that the OP table is "from the Social Security Administration". Most people grab a period table. It is not a good choice for people who think they are healthy enough to make long term plans.

More discussion here:

http://www.early-retirement.org/forums/f28/longevity-77386.html

When I plug age 50 in 2018 into my calculator, I get numbers very similar to the 11% and 17% in your link, IF I use either the IAM 2012 or RP-2014 table. But, if I use the 2010 SS US Period table, I get numbers like the OP.

 

[street]

Interesting calculator.

 

[Dd852]

I’ve spent too much time managing my financial assets and not enough time reducing death risk it seems!

 

[FANOFJESUS]

Almost 50% of us are gone at 80.

 

[REWahoo]

Almost 50% of us are gone at 80.

Even more depressing, 100% of us are gone at 122.

 

[imoldernu]

Current age 82. I input expected dead @90. Green all the way... 50% chance of death comes at age 88.

According to SS life expectancy chart, for my age, the 50% dead at my current age is 54%.

Just received an update of my college 60th reunion celebration. The numbers of the alive/dead seem to bear this out. 50+% of the class show in the obits.

When I was born in 1936, my life expectancy was age 58.

Funny thing... If I should reach age 90... my life expectancy would still be 4 more years.

Who said.."Numbers is hard."?

 

[REWahoo]

Who said.."Numbers is hard."?

<Hand goes up...>

 

[GravitySucks]

Even more depressing, 100% of us are gone at 122.

There is that 1:6+Billion chance that I am the Highlander. I better reduce my WR accordingly.

I like playing with these calculators, but I am following Bengen's guidance that 4.5% will last for 30 and 4% would last forever in his updated research. (Past doesn't guarantee future, all those other qualifiers...) I think my retirement is more susecptible to war, famine, or asteroids than a flexible 5% withdrawal rate.

 

[Dtail]

There is that 1:6+Billion chance that I am the Highlander. I better reduce my WR accordingly.

I like playing with these calculators, but I am following Bengen's guidance that 4.5% will last for 30 and 4% would last forever in his updated research. (Past doesn't guarantee future, all those other qualifiers...) I think my retirement is more susecptible to war, famine, or asteroids than a flexible 5% withdrawal rate.

Only a female has lived to that age. Better reduce to around 110.
Pulling the trigger on 3% next year. Will strive to adjust to 4% when 65 y.o. comes around.

 

[W2R]

Actually the SS life expectancy table is very comforting to me at age 70 plus six days.

Seems like lately quite a few friends and loved ones, as well many of those celebrities that I admired in my youth, have all been in a mad scramble to croak ASAP, one after the other or sometimes even on the same day.

Dead as a doornail, gone, nada. Ashes to ashes, dust to dust. Shoves one's own inevitable mortality right in one's face.

"To sleep: perchance to dream: ay, there's the rub;
For in that sleep of death what dreams may come
When we have shuffled off this mortal coil,
Must give us pause" - - W. Shakespeare

But. looking at the above linked table is quite encouraging! Apparently the probability of imminent croakage for those in my age group is not as high as it sometimes may seem. My guess is that probably those who die come to one's immediate attention, moreso than those who do not, and this could be part of the reason behind such mistaken perceptions.

 

[MichaelB]

Belated Happy Birthday, W2R

 

[omni550]

Belated Happy Birthday, W2R

+1

omni

 

[W2R]

Belated Happy Birthday, W2R

+1

omni

Ha ha!!! Thank you very much!!

Wasn't meaning to fish for happy birthday wishes, but I appreciate them and all of you so much.

 

[karen1972]

I saw this elsewhere, first I thought looking at the subtitle, what a horrible party game RICH, BROKE or DEAD?

I did send this to several OMY friends earlier today because well OMY is all great until you realize your way more likely dead than broke.

At 77 I have a 10% chance of being broke but a 20% chance of being dead... hmm playing the odds I'm ok retiring now especially since thats with a lot of padding.

 

[Onward]

Very interesting calculator!

 

[Delawaredave5]

What does "dead" mean ?

If I enter Retirement Age of 40 and 50 for Retirement Years, 17.2% Dead comes up at age 65.

If I enter Retirement Age of 60 and 30 for Retirement Years, 7.8% Dead comes up at age 65.

So "% Dead" in a given year is probability going forward that you'll die before running out of money ?

It is not probably that you'll die that year (I hope not....).

 

[orangehairfella]

Worth considering that wealth can have a significant impact on longevity

This page doesn’t suggest that the application corrects for the extra 5-10 years of life expectancy of someone with enough money to retire at the applocation’s default of 40.

https://news.harvard.edu/gazette/story/2016/04/for-life-expectancy-money-matters/

 

[karen1972]

What does "dead" mean ?

If I enter Retirement Age of 40 and 50 for Retirement Years, 17.2% Dead comes up at age 65.

If I enter Retirement Age of 60 and 30 for Retirement Years, 7.8% Dead comes up at age 65.

So "% Dead" in a given year is probability going forward that you'll die before running out of money ?

It is not probable that you'll die that year (I hope not....).

It should be chance you would die before 65. The odds decrease the longer you live. Take a look at something like Vanguard longevity calculator, if you and your spouse are still alive at 75, the odds of one of you making it to 100 is pretty high. in your 40s/50s, there is a lot of items that take you immediately (stroke, heart attack, car accidents, etc) if you don't have any of those happen, then your likely in good health and will live longer.