Ok, after reading & learning a LOT here, and playing around with several online retirement planning tools over the past few weeks, I'm beginning to feel a little better about the possibility of our making it through (to Age 100). DW is accusing me of obsessing, but keeps reminding me she doesn't want to go back to the grind.
Trying to be fairly conservative, I used parameters of:
Combined (future) average annual return (60S/40B) - 5%
Average Inflation - 4% (6% for medical expenses where possible)
Success rate >95%
With the 4 tools I used (FireCalc, ORP, Flexible, & SmartMoney) I got pretty consistent results on annual spending/withdrawal amounts (which came out to ~3.5% and within $3K of each other) that were 40% higher than our actual expenses , and about $5K higher than estimated by the CFP we hired. Two of the planning tools recommended taking withdrawals from a mix of taxable, tax deferred, and tax free, whereas the CFP went with the conventional draining of taxable assets first. Playing around with this variable, we actually got larger withdrawals and our nest egg lasted longer by taking the mix.
I realize this is an ongoing process which will require lots of futzing into the future, especially during the first few "critical" years, but these numbers are looking satisfactory, which also makes me wonder what I missed, forgot, or did wrong in all 4 planners...
Thoughts, comments, ideas?
Tyro
Trying to be fairly conservative, I used parameters of:
Combined (future) average annual return (60S/40B) - 5%
Average Inflation - 4% (6% for medical expenses where possible)
Success rate >95%
With the 4 tools I used (FireCalc, ORP, Flexible, & SmartMoney) I got pretty consistent results on annual spending/withdrawal amounts (which came out to ~3.5% and within $3K of each other) that were 40% higher than our actual expenses , and about $5K higher than estimated by the CFP we hired. Two of the planning tools recommended taking withdrawals from a mix of taxable, tax deferred, and tax free, whereas the CFP went with the conventional draining of taxable assets first. Playing around with this variable, we actually got larger withdrawals and our nest egg lasted longer by taking the mix.
I realize this is an ongoing process which will require lots of futzing into the future, especially during the first few "critical" years, but these numbers are looking satisfactory, which also makes me wonder what I missed, forgot, or did wrong in all 4 planners...
Thoughts, comments, ideas?
Tyro