Best calculator for early retirement projections

[bingybear]

I still like Fidelity RIP. IIRC the biggest complaint on ER was that it is more conservative than many others. I would be a bit careful with firecalc using historical data if you have a long retirement goal as this will reduce the the number of really bad sequences. It's been a few years since I used Schwab's planner. At that time the customer version was more limited. However, the Schwab rep had a much better tool.

When I started really checking these planners (close to pulling the plug) I used a given spends rate (about how I'd been living). More recently I've looked at how much I can spend. Right now we are caring for aging parents, so are spending and trips are muted.

The most important thing you need to understand is that all these calculators produce is warm fuzzies. Nothing is guaranteed in terms of your ability to retire comfortably. No one is going to cover your expenses if you run out of money. I'd run a few and get comfortable with their estimates. Pick your spending rate. Then live in your retirement with flexibility on spending. Also remember that a 95% success rate is a 95% chance of spending too little and having assets left over (potentially lots of assets).

 

[aggie76]

I have used this one for years and have yet to find a better one. It is very simple yet comprehensive and allows for a lot of " what-if" playing around.
https://www.marketwatch.com/calculator/retirement/retirement-planning-calculator

 

[Dtail]

I have used this one for years and have yet to find a better one. It is very simple yet comprehensive and allows for a lot of " what-if" playing around.
https://www.marketwatch.com/calculator/retirement/retirement-planning-calculator

Yeah forgot about that one. Use that one too. Allows for different inflation based % to be used for a range of expense categories.

 

[ncbill]

I still like Fidelity RIP. IIRC the biggest complaint on ER was that it is more conservative than many others. I would be a bit careful with firecalc using historical data if you have a long retirement goal as this will reduce the the number of really bad sequences. It's been a few years since I used Schwab's planner. At that time the customer version was more limited. However, the Schwab rep had a much better tool.

When I started really checking these planners (close to pulling the plug) I used a given spends rate (about how I'd been living). More recently I've looked at how much I can spend. Right now we are caring for aging parents, so are spending and trips are muted.

The most important thing you need to understand is that all these calculators produce is warm fuzzies. Nothing is guaranteed in terms of your ability to retire comfortably. No one is going to cover your expenses if you run out of money. I'd run a few and get comfortable with their estimates. Pick your spending rate. Then live in your retirement with flexibility on spending. Also remember that a 95% success rate is a 95% chance of spending too little and having assets left over (potentially lots of assets).

I also found Fidelity's retirement calculator to be the most conservative but for some that might be what they consider "best."

 

[Chuckanut]

I used FireCalc and a MonteCarlo simulator offered by Vanguard. When both assured me I could retire, I did.

 

[Doc Holiday]

I FIREd last year and prior to that tried every available calculator to reassure myself electronically that I was going to be fine. I ultimately ended up loving the Fidelity retirement program the most, with a close second and third being Firecalc and Personal Capital (free version).
All of these have the ability to change multiple variables and Fido and PC import my data for me. Fido and Firecalc have the most variables to personalize.
I like Flexible Retirement Planner too, but don’t have the guidance or knowledge to know how to realistically adjust variables for Monte Carlo projections.

As others have pointed out, Firecalc uses historical data whilst Fido and PC use Monte Carlo sims. I like seeing both sides of things.

Given that all my accounts are at Fidelity I really dug deeply into the retirement program because I could get answers on the assumptions used in the calculator from my advisor. You can read the methodology section for a better understanding, but be prepared for brain freeze.

One important point with Fido is that they do NOT have any black swan events randomly placed in their data. A real one, like 2008, could throw your numbers off. However, given that I am very successful for 40 year planning at significantly below average setting, I am happy. Seems unlikely the market would be at the worst 10% returns for 40 years straight. My CFP at Fidelity said that the sig below/below/average numbers are based on returns for equities, varying from 5-6 up to 10% returns.

The retirement score (only available pre-retirement) btw is essentially based on if you have money to last you to planning age in a significantly below average environment with 100 being running out at that age.

Also of note, using the detailed budget within Fidelity gives you a much more accurate result as they have different rates of inflation for various inputs like health care.

Fidelity uses your AA to help calculate results, but not individual funds.

It also uses your pre-tax, post-tax, and Roth to decide on withdrawal orders and assumed taxes (it calculates the required withdrawal including your taxes to provide you with your budget spend). You can figure out presumed taxes by looking at the chart display and subtracting expenses from total withdrawals. Although you enter the state you live in, this is not always accurate. My state of Oregon for example taxes capital gains, but is not included in the software, in spite of me entering Oregon. Seems like something they could/should fix.

Fidelity is trying to get me to use their actively managed accounts which would allow me access to a new product called eMoney. Apparently it’s much more powerful than either their retirement program or their Full View. I may get a chance to try it for free so can report back if people are interested. I can’t imagine any software is worth 1% AUM though unless it has some super smart tax moves.

Everything is working out fine so far in early retirement, but can’t seem to stop looking for that bump of dopamine I get when I find a NEW calculator and it gives me a good result!

Cheers and happy calculating.

 

[FREE866]

I didn’t see Portfolio Visualizer mentioned. I used most of the tools already mentioned, as well as my own elaborate spreadsheet. Portfolio Visualizer has a Monte Carlo tool that has functionality for modeling Sequence of Returns Risk. I used all the various tools mentioned in tandem to evaluate my portfolio as well as validate my elaborate spreadsheet...

Issue I have with Portfolio Visualizer is that when I run the Monte Carlo Simulation the time period only goes back to 1995...that isn't very far back...

https://www.portfoliovisualizer.com

 

[MRG]

I also found Fidelity's retirement calculator to be the most conservative but for some that might be what they consider "best."

+1
Most conservative and it is great to detail out your expenses. Firecalc was next. I used most of the others and thought they were "happy path".

 

[Dtail]

The retirement score (only available pre-retirement) btw is essentially based on if you have money to last you to planning age in a significantly below average environment with 100 being running out at that age.

Fidelity is trying to get me to use their actively managed accounts which would allow me access to a new product called eMoney. Apparently it’s much more powerful than either their retirement program or their Full View. I may get a chance to try it for free so can report back if people are interested. I can’t imagine any software is worth 1% AUM though unless it has some super smart tax moves.

Even though retired, I still use Fidelity and just change my retirement date to next year to still receive worthwhile results, since it is not using sequential results anyway.

As to eMoney, I do not have any managed funds at Fidelity and my rep still showed me eMoney to play around with. Perhaps one has to be a Private Client (>1mm)? Anyway, the program is still in testing and not ready for accurate results yet.

 

[Koogie]

When I feel like playing around with one I usually prefer *********

I like the interface better and the scenarios seem easier to use.


edit: huh. okay. why was my choice of the "other" fire calculator
blocked by the forum software ? did i miss a controversy sometime ?

 

[braumeister]

why was my choice of the "other" fire calculator
blocked by the forum software ? did i miss a controversy sometime ?

Yes.
It's an old story and I don't want to get into it, but some will tell you that the basis of that one was a blatant unauthorized ripoff of FIRECalc, basically a theft of intellectual property by underhanded methods. It got some modifications after the fact, but the owners of FIRECalc really don't want to give it any promotion.

 

[Koogie]

Hmm... okay. Been here over 12 years but must have missed that one. Sounds like I didn't miss much though.

Well... if true, the censorship is understandable, I guess. Seems a little bit childish but it's not my sandbox, I'm just a guest.

Play on !!

 

[Offgrid Organic Farmer]

As we were approaching my retirement, we did it in our heads.

We knew how much my pension was going to be, and our monthly budget was less.

Since I make more from my pension than how much we spend in our Cost-Of-Living it seemed rather obvious that we would be okay.

 

[WestUniversity]

Issue I have with Portfolio Visualizer is that when I run the Monte Carlo Simulation the time period only goes back to 1995...that isn't very far back...



https://www.portfoliovisualizer.com

Did not realize that...

 

[pb4uski]

Issue I have with Portfolio Visualizer is that when I run the Monte Carlo Simulation the time period only goes back to 1995...that isn't very far back...

https://www.portfoliovisualizer.com

Did not realize that...

You're not using the right part of the tool... click on the "Portfolio Visualizer" logo in the upper left corner and that will take you to a page with different tools, including Monte Carlo analysis in the lower left corner.

 

[akl432]

Everyone has been so helpful - thank you so much!

Do you include Social Security in your future income projections? I am 39 years old. I'm trying to decide whether to assume $0, my full amount ($3,000/month), or a reduced amount ($500 or $1,000/month). I am leaning toward $1,000/month, starting at age 70 (assuming that the Social Security benefit for future retirees will be reduced, and the full retirement age will increase). Or do you think it is more realistic to assume $500/month, or $0?

I'm curious to hear what assumptions you all use in your models for Social Security, especially for those of you closer to my age (or what you would recommend for someone my age). It makes a big difference in my results in the model (if I assume $0 versus some amount of Social Security).

 

[MBAustin]

I think it is highly unlikely for SS to disappear. The last projection I saw was that if nothing changes legislatively, SS could still pay ~70% of normal. That might decrease over time, but I would think 50% at age 70 would be a reasonable assumption to be moderately conservative.

 

[FREE866]

You're not using the right part of the tool... click on the "Portfolio Visualizer" logo in the upper left corner and that will take you to a page with different tools, including Monte Carlo analysis in the lower left corner.

that's what I've been doing ....I realize now though that 1995 is earliest time frame because a % of my assets are in emerging markets....my sense is data on that asset class didn't start until 1995 so thats why my results showed that

 

[pb4uski]

that's what I've been doing ....I realize now though that 1995 is earliest time frame because a % of my assets are in emerging markets....my sense is data on that asset class didn't start until 1995 so thats why my results showed that

Nope.

Since you aren't getting it, try this link: https://www.portfoliovisualizer.com/monte-carlo-simulation

 

[pb4uski]

Everyone has been so helpful - thank you so much!

Do you include Social Security in your future income projections? I am 39 years old. I'm trying to decide whether to assume $0, my full amount ($3,000/month), or a reduced amount ($500 or $1,000/month). I am leaning toward $1,000/month, starting at age 70 (assuming that the Social Security benefit for future retirees will be reduced, and the full retirement age will increase). Or do you think it is more realistic to assume $500/month, or $0?

I'm curious to hear what assumptions you all use in your models for Social Security, especially for those of you closer to my age (or what you would recommend for someone my age). It makes a big difference in my results in the model (if I assume $0 versus some amount of Social Security).

If no action is taken, the SS Trustees estimate that benefits will be haircut ~23% starting in 2034.

 

[FREE866]

Nope.

Since you aren't getting it, try this link: https://www.portfoliovisualizer.com/monte-carlo-simulation

I AM getting it....example:when I test a portfolio of 100% "us stock market" the returns show data back to 1972.Which isn't ideal but whatever

When I do 50% "us stock market" and 50% "emerging markets" I get this:
Monte Carlo simulation results for 10000 portfolios with $1,000,000 initial portfolio balance using available historical returns data from Jan 1995 to Dec 2018.

Are YOU getting it?

 

[Dtail]

If no action is taken, the SS Trustees estimate that benefits will be haircut ~23% starting in 2034.

And I believe the 23% discount theoretically should last 40-50 years IIRC, so no true reason to go below that number, but understand conservatism.

 

[Jerry1]

Do you include Social Security in your future income projections?

One way to look at this is that not including SS is being conservative. If you can retire without SS in your assumptions, then whatever you do get will be great.

If you will need SS to retire, then you have some work to do. At 39, you will have a lot of years that you did not make money. You'll need a tool that allows you to do a proper estimate. Once you have that, I would reduce that number by 25% and see where you're at.

 

[imoldernu]

I know this doesn't belong here, but it would be helpful to see a detailed calculator that would work for those of us who have been retired for a long time.

Instead of showing accumulation of assets, with the thought of maintaining net worth at the goal post, a realistic, sequenced means of spending down... that takes into consideration what I call phase II of retirement.

I would envision a spreadsheet that detailed anticipated expenses, by item, by year, showing the increase in things like healthcare, but also including the other end... a reduction in the costs of travel, entertainment, automobile and a personal evaluation of the reduction in costs of "fun" and "fix it" items.

Then to add in the gain from downsizing or sale of current home... as well as adding the possible/probable costs of turning to eldercare... CCRC's etc.

I guess you could call this a "budget", and that's the way we do our calculations. Still... with a timeline that could go from age 50, to age 90 a structured worksheet that covers all the variable expenses would allow a long term retiree to keep perspective.

In our case, doing this, has freed our minds to spend more, without worrying that we might lose control of the longer term future.

 

[akl432]

One way to look at this is that not including SS is being conservative. If you can retire without SS in your assumptions, then whatever you do get will be great.

If you will need SS to retire, then you have some work to do. At 39, you will have a lot of years that you did not make money. You'll need a tool that allows you to do a proper estimate. Once you have that, I would reduce that number by 25% and see where you're at.

Thanks, everyone, for the additional information on SS assumptions. Yes, I overlooked the major consideration that retiring very early has a major impact on the SS benefit calculation (i.e. many years of counting zeros for annual SS income). Now, I am trying to re-estimate my SS benefit assuming various early retirement ages, but the SS calculator on the government website will only let me assume taking SS at 62 (it won't let me assume delaying taking SS at 67 or 70, if I input the age to stop working at less than 62). Off to search for a SS calculator that will do so!