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Burns refers to FireCalc
Old 12-19-2009, 02:15 PM   #1
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Burns refers to FireCalc

Interesting use of FireCalc in this article.

Quote:
So what happens when you consider market volatility?
Investors may die broke.
Using Firecalc, an online simulation calculator, I found that a $100,000 portfolio with an expected return of 8 percent, expenses of 3.1 percent (calculated using the methodology described on the Fidelity website), and a 5 percent of original investment withdrawal would often run out of money before 30 years.
How often? It depends, but under each scenario there was a significant chance of ending with zero.
Even if it is only a chance event, that’s a long way from the $84,706 shown so positively by the Fidelity online calculator. The important fact here is that any calculator that includes market volatility will reveal materially worse results than the static model Fidelity uses on its website because market volatility always has a cost.
Quote:
a spokesperson for the Fidelity Annuities group said: “I wouldn’t disagree with any of your points. But I do think these products play a role in providing lifetime income.”
In other words~"You're correct, but we're still going to sell the hell out of this crap."
The High Cost of a Guaranteed Income - Registered Investment Advisor
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Old 12-19-2009, 02:19 PM   #2
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Nice to see FIRECalc getting positive press from a respected financial columnist.
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Old 12-20-2009, 12:27 AM   #3
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Quote:
Originally Posted by REWahoo View Post
Nice to see FIRECalc getting positive press from a respected financial columnist.
It didn't look too good in his original newspaper article, which was out a few weeks ago... he referred to FIRECalc as a Monte Carlo simulator then!

The text on the website has been corrected. Someone must have emailed him. I had thought about doing it then, but hey, I'm ER'd, an' I wanted to minimize my carbon footprint, an' it was a Sunday, an'...
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Old 12-20-2009, 05:55 AM   #4
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Quote:
Originally Posted by Telly View Post
It didn't look too good in his original newspaper article, which was out a few weeks ago... he referred to FIRECalc as a Monte Carlo simulator then!

The text on the website has been corrected. Someone must have emailed him. I had thought about doing it then, but hey, I'm ER'd, an' I wanted to minimize my carbon footprint, an' it was a Sunday, an'...
The print version has been corrected as well. It appeared in the paper here on Saturday and was identical to the website article - no mention of Monte Carlo.
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