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Chart of Withdrawal Rate - Success Rate - Yrs Retired
Old 10-03-2013, 01:53 PM   #1
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Chart of Withdrawal Rate - Success Rate - Yrs Retired

Just playing with 3D charts...
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Old 10-03-2013, 01:58 PM   #2
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Nice chart.
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Old 10-03-2013, 02:01 PM   #3
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yeah bravo.
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Old 10-03-2013, 02:05 PM   #4
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Really cool, easy to read chart!
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Firecalc/Other Calculator W/drawal Rates
Old 10-03-2013, 02:56 PM   #5
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Firecalc/Other Calculator W/drawal Rates

If I'm hijacking this thread, please just ignore me or something...

Great chart, but my issue with Firecalc is it doesn't factor in for taxes though it does factor in fees. I-Orp and FRIP factor taxes but not fees. Given these limitations, does anyone else find it difficult to reconcile results produced by these 3 calculators? For me, I-Orp is the most generous, followed by FRIP, and then by Firecalc if I try to "guestimate" taxes (particularly since I'm delaying SS til 70 and looking at minimizing RMD's plus SS taxes). I would find this chart more meaningful if Firecalc included taxes like I-Orp does.

Finally, and forgive me, but isn't any xExpenses figure relatively meaningless unless both taxes and fees are both considered?
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Old 10-03-2013, 03:58 PM   #6
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If I'm hijacking this thread, please just ignore me or something...

Great chart, but my issue with Firecalc is it doesn't factor in for taxes though it does factor in fees. I-Orp and FRIP factor taxes but not fees. Given these limitations, does anyone else find it difficult to reconcile results produced by these 3 calculators? For me, I-Orp is the most generous, followed by FRIP, and then by Firecalc if I try to "guestimate" taxes (particularly since I'm delaying SS til 70 and looking at minimizing RMD's plus SS taxes). I would find this chart more meaningful if Firecalc included taxes like I-Orp does.

Finally, and forgive me, but isn't any xExpenses figure relatively meaningless unless both taxes and fees are both considered?
FIRECALC and i-ORP are free remember, and no calculator can provide an "xExpenses figure" that's anything but a ballpark number at best. I find them both useful planning tools for different reasons, and future taxes are an unknown like most input/variables, especially for long term projections. I'd rather factor in taxes for myself, so I know what the assumptions are, and range of sensitivity.
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Old 10-03-2013, 04:06 PM   #7
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Great chart, but my issue with Firecalc is it doesn't factor in for taxes...
If you find a calculator that accurately accounts for future taxes you might suggest whoever designed it also include accurate future market returns. That's a calculator I would gladly pay to use.
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Old 10-03-2013, 04:46 PM   #8
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Brilliant responses. Thank you. This is why I love this site. Retiring 5 years earlier than originally planned (ground zero date: 12/14), overcame my OMY syndrome, read plenty of recommended awesome books (e.g.., 4 pillars of investing), created and committed to an investment plan--and done a whole lot more to create my ER plan--all because of what I've learned from this site. Thank you. I mean really.
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Old 10-03-2013, 05:02 PM   #9
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I've used them all and do like the FRIP for the reason that it does appear to do a fairly good job of accounting for taxes when you look at details of future withdrawals. Yeah, I assume they're using current tax rates but that's about as good as anything. We have over 1/2 our stuff in tIRA's and FRIP does a good picture of how the required withdrawals hit at 70-1/2. Motivating me to sit down with tax adviser to move some to Roths.
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Old 10-03-2013, 06:25 PM   #10
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Yes, very nice chart. I think this does a great job of demonstrating that it really isn't that huge of a sacrifice to take a conservative stance regarding success and longevity. Some people feel it is going to extremes to plan for above 95% success, and/or for more than a 30 year retirement, but the extra assurance doesn't really 'cost' all that much.

100% for 40 years only required a 20% adjustment (in spending or portfolio size) compared to 95% and 30 years. And it seems to level off beyond there. Of course everyone must decide for themselves, but it's not like everything has to double for a marginal gain.

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...

Great chart, but my issue with Firecalc is it doesn't factor in for taxes though it does factor in fees. ...

Finally, and forgive me, but isn't any xExpenses figure relatively meaningless unless both taxes and fees are both considered?
I guess the way I look at it is, it isn't a limitation of FIRECalc, it simply means you must consider it in your expenses. FIRECalc still does what it does just fine. But that part is up to you.

I have not played with those other calculators much (IIRC they use Monte Carlo, which does not appeal to me), but I don't know how they could guess at future taxes. I think I'd rather just take my own WAG.

-ERD50
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Old 10-03-2013, 06:54 PM   #11
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Great chart. Love to see with a 50/50 stock and bond mix.
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Old 10-03-2013, 07:00 PM   #12
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That is a great chart, Midpack. Thanks.
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Old 10-03-2013, 07:17 PM   #13
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Great chart. Love to see with a 50/50 stock and bond mix.
It wouldn't change much at all, but you can easily test that for yourself by just entering a couple cases and comparing them...
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Old 10-04-2013, 07:41 AM   #14
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Thanks for that chart.
I do these manually / in table form to assess these sensitivities.
My takeaway is that reducing spending 20% to go from 95 to 100% isn't necessary.
If a bad trajectory occurs then I'll adjust future spending.
You can run firecalc beginning in a future year - at lower spending and with fewer years to fund. That way you can assess how effective such cuts will be out in time.

On question: is a 3-4% increase in the firecalc success rate statistically significant or is it in the noise?
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Old 10-04-2013, 07:52 AM   #15
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Noise in my opinion.
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Old 10-04-2013, 08:12 AM   #16
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Thanks for that chart. ....

One question: is a 3-4% increase in the firecalc success rate statistically significant or is it in the noise?
If I were in one of the six scenarios that failed, I would consider it significant. You can't pay the bills with 'noise'. Plus the next dozen or so that came within a cat's whisker of failing. That would not be too comfortable.

Many feel that the future could well be worse than the past. You might need some extra margin.

-ERD50
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Old 10-04-2013, 08:50 AM   #17
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Sweet chart -thanks Midpack!
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Old 10-04-2013, 09:06 AM   #18
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On question: is a 3-4% increase in the firecalc success rate statistically significant or is it in the noise?
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Noise in my opinion.
Some people can (temporarily) lose perspective with retirement calculators/planning, but if you look at the underlying result from FIRECALC, is there any doubt? Calculators planners can suggest where to aim the shotgun, but you still get a shotgun blast scatter no matter where you aim...
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
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Old 10-04-2013, 09:09 AM   #19
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Some people feel it is going to extremes to plan for above 95% success, and/or for more than a 30 year retirement, but the extra assurance doesn't really 'cost' all that much.

100% for 40 years only required a 20% adjustment (in spending or portfolio size) compared to 95% and 30 years.
I think "only" might be loosely applied here.

Depending on market performance and stash rate that extra 20% of portfolio size might be five more years of work, no small chunk of someone's life.
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Old 10-04-2013, 09:58 AM   #20
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Thanks for that chart.
I do these manually / in table form to assess these sensitivities.
My takeaway is that reducing spending 20% to go from 95 to 100% isn't necessary.
If a bad trajectory occurs then I'll adjust future spending.
You can run firecalc beginning in a future year - at lower spending and with fewer years to fund. That way you can assess how effective such cuts will be out in time.

On question: is a 3-4% increase in the firecalc success rate statistically significant or is it in the noise?
+1.
Unless you plan to slavishly increase your annual spend CPI and have no buffer in your budget, a little flexibility can go a long way.
Nice chart.
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