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Old 03-27-2014, 01:16 PM   #21
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RIP does that as well.
IIRC, they default to 7% inflation for medical costs and 3.5% for everything else, but you can tweak it to your liking. A very nice feature.
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Old 03-27-2014, 01:22 PM   #22
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Our case is a lot simpler than most people's. Almost all of our assets except the house are in a traditional IRA.
I used outside references to decide on my AA. (100% equities = 50% US/50% foreign).
I then used FireCalc to decide my SWR (3.5% to 4%--big surprise) in order to survive 30 years.
Then I built a spreadsheet that modeled MRDs and taxes from now until age 100. I used a couple of on-line free tax estimator programs to estimate our taxes year-by-year. I compared moving everything to a Roth in different amounts with leaving it in the tIRA. I also checked what would happen if I died at different ages.
I made simple assumptions about ROI (6%), inflation (3%) and the growth of SS over time (1.5%) and reduction of SS benefits by 25% in 2030.

I can't read the future so I chose a simplified model just to develop a reasonable worst-case strategy by comparing different options and learn about the Tax Torpedo.


I am reasonably confident that I have a good strategy now for a best worst-case. Anything that happens different will be a bonus (except if we both die early).
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Old 03-27-2014, 01:39 PM   #23
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Originally Posted by NanoSour View Post
Having ER'd 9 months ago here are my most trusted retirement calculators.

1) ESPlanner - there is a free online version, but I paid $199 for the Monte Carlo edition. It does an excellent job with tax consideration, both Federal and State, and with SS estimates. Wouldn't have pulled the plug without this calculator.

2) Flexible Retirement Planner - Another excellent calculator that you can use online or download to your computer and it's free. Does include Monte Carlo simulation and considers user controlled tax implications. Good documentation on the website.

3) Optimal Retirement Planner - This free online tool does consider Federal taxes and also provides a suggested Roth conversion strategy.

4) FireCALC - A good calculator for an initial look at you situation, but not having taxes built in is somewhat limiting.

All of these calculators take considerable time to learn how to use and understand their outputs. However, the time invested in them is well worth it and I never would have pulled the plug without them.
+1 regarding ESPlanner. Found it to be very robust, modeling taking SS at various ages, state/federal taxes, and the ability to model a number of life changes as well. I originally used just the Monte Carlo, but after the hysteria on the BH forum regarding Bernstein's "why keep playing when you've won the game" (which I must admit concerned me as well), I found the ESPlanner upside investing tool incredibly comforting. I found out even if the stock portion of my PF loses all value, I can still maintain my standard of living. Bernstein's paper and the tool allowed me to reevaluate my AA such that I'll be reducing my equity exposure next time I rebalance with no consequence to my basic standard of living.

Additionally, I've used all of the above calculators, along with Financial Engines through VG, VG's free FP consult, and a couple others whose names I can't recall. All provided confirmation that my upcoming [not soon enough] ER date is ok.
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Old 03-27-2014, 01:42 PM   #24
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In addition to Firecalc I use Quicken Lifetime Planner, Fidelity Retirement Income Planner, and Financial Engines (available through my Megacorp). Via the Financial adviser that Megacorp pays for, I also have them use a modeling tool for me. I still use a spreadsheet to test some unique situations.

I more look at how much the models agree as opposed to their individual specific results. I feel safer taking the "lowest common denominator" among them.
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Old 03-27-2014, 01:59 PM   #25
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Fidelity's RIP, seems to give the most conservative answers, Firecalc easy to use, did TRPrice it was ok. I've not used quicken or some of the other's. Wonder if their more conservative?
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Old 03-27-2014, 02:06 PM   #26
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Fidelity's RIP, seems to give the most conservative answers, Firecalc easy to use, did TRPrice it was ok. I've not used quicken or some of the other's. Wonder if their more conservative?
MRG
Quicken is a deterministic planner and relies on the investment return that you provide, so it can be as conservative as you decide. You can also look at what-if the return is a bit higher or lower with all other assumptions held constant and get a sense as to how sensitive portfolio survivorship is to average investment return.

I use the historical return for a 60/40 portfolio with a significant haircut.
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Old 03-27-2014, 02:14 PM   #27
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My favorite deterministic planner is Quicken Lifetime Planner (included in Quicken Deluxe and higher). It does model RMDs as I recall but does not model income taxes. One of the inputs is a average tax rate before retirement and during retirement.

I'm not aware of any planner that includes tax calcs within though I have done that in my personal spreadsheet retirement model (as well as Roth conversions and RMDs). My AA is static (60/40) so my AA is reflected in the investment rate of return I use.

While Quicken does have separate categories for taxable, tax-deferred and tax-free, in the QLP reporting it only shows taxable and tax-deferred (which includes both tax-deferred and tax-free).

I use FireCalc principally as a stochastic check of my QLP plan.
pb4uski,
I don't understand your statement that QLP does not model income taxes. If I click on any bar in the Plan Results Graph I get a report for the future year associated with the bar I clicked. The report includes Expenses and under Expenses it lists "Tax on Salaries and Benefits", "Tax on Special Income", and "Tax on Withdrawals". In my case, the year I will hit 70 the "Tax on Withdrawals" goes way up to account for RMD withdrawals. The "Tax on Withdrawals is about the same as other tools that calculate future taxes on RMDs. Of course as a deterministic model, you only get one middle-of-road view of what your retirement finances might look like.
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Old 03-27-2014, 02:32 PM   #28
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Originally Posted by jollystomper View Post
In addition to Firecalc I use Quicken Lifetime Planner, Fidelity Retirement Income Planner, and Financial Engines (available through my Megacorp). Via the Financial adviser that Megacorp pays for, I also have them use a modeling tool for me. I still use a spreadsheet to test some unique situations.

I more look at how much the models agree as opposed to their individual specific results. I feel safer taking the "lowest common denominator" among them.
If you are using the same Financial Engines that I use, it doesn't work if you are retired. You have to enter a retirement date that is in the future.

If I believed the results I get from Financial Engines, I could spend a whole lot more time partying in Las Vegas! It is 15% to 20% more optimistic on available annual spending than other tools I use.
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Old 03-27-2014, 04:00 PM   #29
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pb4uski,
I don't understand your statement that QLP does not model income taxes. If I click on any bar in the Plan Results Graph I get a report for the future year associated with the bar I clicked. The report includes Expenses and under Expenses it lists "Tax on Salaries and Benefits", "Tax on Special Income", and "Tax on Withdrawals". In my case, the year I will hit 70 the "Tax on Withdrawals" goes way up to account for RMD withdrawals. The "Tax on Withdrawals is about the same as other tools that calculate future taxes on RMDs. Of course as a deterministic model, you only get one middle-of-road view of what your retirement finances might look like.
I guess I wan't clear. QLP does include taxes, but only at a single rate that you provide applied to the projected income for that projection year. It doesn't increase or decrease the tax rate if the income in a particular projection year is high or low.

I was comparing it with my spreadsheet model which computes a taxable income based on investment returns, pension income, SS, Roth conversions, RMDs, HSA contributions, medical costs, property taxes, mortgage interest, state income taxes, charitable contributions, personal exemptions, etc and then applies the current progressive tax rates based on brackets that are adjusted for inflation. So in a year where income is higher (like when SS and RMDs kick in) the tax rate is higher.
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Old 03-27-2014, 04:22 PM   #30
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Some see it a bit differently, but still noteworthy:

I'm not aware of any retirement calculator that incorporates fluctuations in bond values.
From the thread linked above, it wasn't included in the famous Trinity Study.
The first calculator Willer linked in reply #7 addresses the bond issue.
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Old 03-27-2014, 04:37 PM   #31
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The first calculator Willer linked in reply #7 addresses the bond issue.
I have no confidence in the accuracy of that particular calculator.
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Old 03-27-2014, 04:48 PM   #32
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Before I found this site and FIRECALC, the main calculators I used were those through the Fidelity and Vanguard sites. Fidelity had a calculator I used before RIP superseded it, and Vanguard has free use of Financial Engines for its customers.
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Old 03-27-2014, 04:55 PM   #33
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I worry less about investment performance and more about meeting ever-inflating expenses. I started with a spreadsheet, found I had to re-organize it at every turn, so I wrote a web page that meets my needs. It just graphs income, expenses, and savings balance, and it also will show an after-tax income line based on 2013 tables. Any are welcome to play with it at http://pulpitrock.net/incomeexpense; no server, no data storage, no NSA tap. .. No support either, but I don't mind comments...
That said, I'll be doing ESPlanner at some point, just to figure out SS.
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Old 03-27-2014, 05:30 PM   #34
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I worry less about investment performance and more about meeting ever-inflating expenses. I started with a spreadsheet, found I had to re-organize it at every turn, so I wrote a web page that meets my needs. It just graphs income, expenses, and savings balance, and it also will show an after-tax income line based on 2013 tables. Any are welcome to play with it at http://pulpitrock.net/incomeexpense; no server, no data storage, no NSA tap. .. No support either, but I don't mind comments...
That said, I'll be doing ESPlanner at some point, just to figure out SS.
Linky not found..

Not Found

The requested URL /incomeexpense; was not found on this server.

(OK, remove semicolon on end and all is good)
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Old 03-27-2014, 07:07 PM   #35
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That's what I get for posting with my phone. .. linky fixied.
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Old 03-27-2014, 09:38 PM   #36
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In case Income/Expense Analyzer isn't intuitive (ha...), start by entering your birth year on the Global Settings page. Then, go to Item Entry page (scroll to the bottom, if your browser window isn't large enough) and enter an aggregate expense: Name: Expenses; Type: Expense; Amount: 3000 (monthly aggregate expenses); Inflation: 3 (annual percent); Start: 2014; End: 100 (your age). Click Add/Change, regard the curve in the graph.

Entries in each category contribute to a separate line. Distributions contribute to two lines: the distribution balance and the income line if there is a monthly amount taken.

I just looked at it from the perspective of someone who'd never seen it before, and it's not obvious how to use it. I'll have to write some instructions...
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Old 03-27-2014, 10:13 PM   #37
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If you are using the same Financial Engines that I use, it doesn't work if you are retired. You have to enter a retirement date that is in the future.

If I believed the results I get from Financial Engines, I could spend a whole lot more time partying in Las Vegas! It is 15% to 20% more optimistic on available annual spending than other tools I use.
Sorry about that - I saw the OP's question and was focused on the "FI" in the question, not the RE. Interestingly, it was "only" about 10% more optimistic than Firecalc's "95% success" level forecast for us. What was the old adage - throw out the high and the low results and average the rest...
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Old 03-28-2014, 07:50 AM   #38
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Anyone have suggestions on calculators or tools to model situations where one would move between states with different tax structures during retirement? We expect to stay in our current (no income tax) state for a while after ER, and then move to another (moderately high income tax) state. I am interested in something that could be used to help plan strategies for various things in order to determine which would be better to do in our current vs. future location. Some of these things that come to mind are:
  • Roth conversions
  • Taking cap gains
  • Take a pension lump sum in current location vs. regular payments in future location
  • Take a lump sum 401k distribution in current location vs. regular payments in future location
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Old 03-28-2014, 08:48 AM   #39
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For different state tax situations, I would think just having both states tax forms in TurboTax would allow you to see how things might be different. So a combo of TurboTax run with state A, then state B, plus a spreadsheet to lay out the important figures side by side, one line per year into the future.
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Old 03-28-2014, 09:48 AM   #40
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I like the cFIREsim model better than Firecalc. It seems much easier to use without jumping through all the pages.

ORP and FID are in the stable as is Flexible Retirement Planner.

Then of course there is my own spreadsheet model that only uses inflation and return estimates.
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