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ESPlanner software
Old 08-04-2004, 05:50 PM   #1
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ESPlanner software

I'm reading Scott Burns' 'The Generational Storm' and noticed that he mentions the ESPlanner (i.e., Economic Security Planner) software developed by his co-author economist Laurence Kotlikoff.

www.esplanner.com

It costs $149 for an individual license. Has anybody used it?

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Re: ESPlanner software
Old 08-05-2004, 08:07 AM   #2
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Re: ESPlanner software

I'll try it as soon as it comes with a $149 discount...

I think there are enough free planners that give you the same sort of result. While interesting, I cant imagine paying for something that because it cant predict the future, cant really do anything except extend the academic exercise of 'planning'. I suppose if you're uncomfortable about things, continuing to play with tools that tell you things will be ok just might make you feel better.

I hope that doesnt sound too negative or cynical. Maybe I've just been over-hocused with regards to 'tools'.

I do have another calculator (free) that tells me that the $149 will turn into roughly $3500 invested over a long period of time due to the miracle of compounding!
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Re: ESPlanner software
Old 11-02-2004, 08:40 AM   #3
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Re: ESPlanner software


intercst /TH -
Can you provide an overview or summary of *****' concerns over SWR calculations? I've used dory36 calc - impressive - but this "*****" seems to believe these are somehow invalid. I know he's been discredited in places, but not knowing the history it's hard to tell if there's anything to his claims. Help?
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Re: ESPlanner software
Old 11-02-2004, 09:05 AM   #4
 
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Re: ESPlanner software

Quote:
intercst */TH -
*Can you provide an overview or summary of *****' concerns over SWR calculations? I've used dory36 calc - impressive - *but this "*****" seems to believe these are somehow invalid. I know he's been discredited in places, but not knowing the history it's hard to tell if there's anything to his claims. *Help?
All of his posts are available on this forum for the last year. USe the Search Function on the SWR Forum, and you can read all of them.
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Re: ESPlanner software
Old 11-03-2004, 05:16 AM   #5
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Re: ESPlanner software

I didn't feel compelled to drop the licensing fee, but Burns' site has a link to the supporting article posted at the TIAA CREF Institute website. It explains the methodology in detail (I think there are some holes in the logic) and gives some examples of what the model suggests for coverage.
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Re: ESPlanner software
Old 12-08-2006, 01:41 PM   #6
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Re: ESPlanner software

Quote:
Originally Posted by This space for rent
I'll try it as soon as it comes with a $149 discount...

I think there are enough free planners that give you the same sort of result. While interesting, I cant imagine paying for something that because it cant predict the future, cant really do anything except extend the academic exercise of 'planning'. I suppose if you're uncomfortable about things, continuing to play with tools that tell you things will be ok just might make you feel better.

I hope that doesnt sound too negative or cynical. Maybe I've just been over-*****ed with regards to 'tools'.

I do have another calculator (free) that tells me that the $149 will turn into roughly $3500 invested over a long period of time due to the miracle of compounding!
Well, the ESPlanner folks have a very open ended money back policy, so as long as you don't wait 6 months, you can try the product risk free so the money isn't an issue.

As for the other free calculators, their methodologies are suspect as are their motives (lots of documentation and discussion on this issue in economic circles). Try them, but don't necessarily trust their advice. The fundamental difference between ESPlanner and the other tools out there is that ESPlanner uses your behavior to state what your results will be and the others ask you to set arbitrary goals and tell you what your behavior SHOULD be.

Most folks using ESPlanner recapture their initial payout quickly (reduced expenses, better savings plans, etc) so the net present value argument about the cost doesn't really make sense.

Best,

Dick Munroe
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Re: ESPlanner software
Old 12-08-2006, 01:44 PM   #7
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Re: ESPlanner software

ESP assumes that your goal is consumption smoothing, does it not? May not be everyone's goal . . ..
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Re: ESPlanner software
Old 12-08-2006, 09:09 PM   #8
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Re: ESPlanner software

Quote:
Originally Posted by munroe at csworks.com

As for the other free calculators, their methodologies are suspect as are their motives (lots of documentation and discussion on this issue in economic circles). Try them, but don't necessarily trust their advice.
As an avid supporter of FIRECalc, and as the developer of the flexibleRetirementPlanner, I firmly believe that as of today, the best planners are in fact free.

As for my motives, the flexibleRetirementPlanner was developed out of intellectual curiosity after I read the work by Guyton on the effects of using a flexible withdrawal methodology to boost SWR's. The site uses google ads to cover hosting costs, but the project is basically not-for-profit.

As for transparency, most of the source code of FRP is published on the web site and the methodology used by the planner is well documented on the site.

Jim
http://www.flexibleRetirementPlanner.com

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Re: ESPlanner software
Old 12-09-2006, 05:53 AM   #9
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Re: ESPlanner software

Quote:
Originally Posted by FRP Guy
As for my motives, the flexibleRetirementPlanner was developed out of intellectual curiosity after I read the work by Guyton on the effects of using a flexible withdrawal methodology to boost SWR's.
Oh no! Someone else besides me brings up Guyton. Is this forum big enough for the both of us?

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Re: ESPlanner software
Old 12-09-2006, 06:36 AM   #10
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Re: ESPlanner software

I've been to the site and played with the calculator. It's easy to work but I've got lots of questions about what the numbers mean and how they got there. I'll work with the documentation and try to figure it out before I pepper the poor guy with questions. He's read Guyton so he can't be all bad.
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Re: ESPlanner software
Old 12-09-2006, 09:18 AM   #11
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Re: ESPlanner software

I like the "flexible retirement planner." It lets you play with a "base" cost of living and put in a large number of special expenses like traveling a lot until you're 75 and stepping it down to zero travel budget at 85.

I am assuming the "median" withdrawl is what the original withdrawl is plus the "other" expenses (but inflation adjusted) times the % shown. Playing with the "travel" or "other" expenses lets me get this to whatever % I want for a given set of input data.

Making changes isn't as user friendly as I would like but nothing is terrible. I had to open the planner twice so I could read the instructions while making changes. If you hit the "back" button, all of the inputs reset to the default values.

Overall, it's a pretty good application of the Guyton philosophy. Playing with the "other" costs lets me account for few expenses as I age -- ala Bernicke. CT should like the concept because it lets the "trailer on the trout stream" be the base with other expenses layered as desired.

I am curious if it uses the "real" market returns like FIRECalc does. It's not intuitively obvious what variations drive the variables in the Monte Carlo analysis.

For the price, it's a great bargain.

My compliments to the developer.
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Re: ESPlanner software
Old 12-09-2006, 10:55 AM   #12
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Re: ESPlanner software

I've had ESPlanner for a couple of years now. It does provide a different perspective (income smoothing) on financial planning that I have not seen elsewhere. I think it is probably more accurate than Firecalc because it does include taxes, but I probably wouldn't spend the $149 again however.
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Re: ESPlanner software
Old 12-09-2006, 02:20 PM   #13
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Re: ESPlanner software

Quote:
Originally Posted by 2B
It lets you play with a "base" cost of living and put in a large number of special expenses like traveling a lot until you're 75 and stepping it down to zero travel budget at 85.
Just a note; Fidelity's Retirement Planner has the same feature (not promoting this free product for Fidelity customers - just noting a feature that was not apparent to me at first)...

- Ron
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Re: ESPlanner software
Old 12-09-2006, 04:00 PM   #14
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Re: ESPlanner software

Thanks for trying out the planner and for the feedback. More comments inline...

Quote:
Originally Posted by 2B
I am assuming the "median" withdrawal is what the original withdrawl is plus the "other" expenses (but inflation adjusted) times the % shown.
That's basically correct. However, since the simulation is run 10,000 times, the median withdrawal is the amount such that half of the trials had a lower number and half had a higher number for the given year.

It's important to keep in mind that unless the probability of success is 100%, some simulation trials ran out of money before the end of the plan. In those cases, the percent of expenses funded would hit 0%. That's why I report the median value rather than the average.

Quote:
Overall, it's a pretty good application of the Guyton philosophy. Playing with the "other" costs lets me account for few expenses as I age -- ala Bernicke. CT should like the concept because it lets the "trailer on the trout stream" be the base with other expenses layered as desired.
I'm glad you made use of that feature. It was a bunch of work to do and now I know at least one person other than myself has used it. Incidentally, the additional inputs tab is also handy for simulating the effects of a market crash in year X of your plan. Just set the portfolio return to something like -20% and the std dev to zero for the year or years you want to simulate the crash in.

Quote:
I am curious if it uses the "real" market returns like FIRECalc does. It's not intuitively obvious what variations drive the variables in the Monte Carlo analysis.
For simulating market returns, FRP only uses the given average return and standard deviation of returns (or multiple sets of them for different periods, if you choose). For each year in each of the 10,000 simulation iterations, the planner "draws" from a pseudo-random pool of returns that are normally distributed according to the average return and std dev given for that year.

Some critics point out that real market returns aren't normally distributed because they have fat tails or show something called kurtosis (or skew). I think this is valid criticism. However, you can roughly compensate for this by either lowering the return or increasing the standard deviation. The canned return/std dev pairs that I've provided to go with each investing style,are adjusted somewhat to account for this and for investment expenses. If you don't like what's there, you can just plug in your own return/std dev using the custom option.

Hope that answers your questions. If anyone wants more details on the inner workings of the planner, please don't hesitate to use the contact email listed on the web site. I obviously find this stuff pretty interesting and I've had a few interesting email conversations with users since the planner was launched.

Jim
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Re: ESPlanner software
Old 12-10-2006, 08:39 AM   #15
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Re: ESPlanner software

Based on the lack of activity on this thread, no one may care but here goes.

In my multiple Flexible Retirement Planner runs it appears that the Monte Carlo approach is even more conservative than FIRECalc. I get a 95% SWR with about 3.3% portfolio withdrawl when I try to match the settings with FIRECalc for a 30 year plan. If I did it right that's a big hit for SWR.

There are some nice features to include the type of accounts money is in and tax rates for different forms of income. Different responses are available to react to portfolio gains and losses. Many different spending options for various timeframes can be put in.

There a lots of options for us anal-retentive types to manipulate and adjust. The results have many things to consider. Paralysis by analysis scenarios are endless.

I like it. Everyone should go visit it and see what they think.


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