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Old 04-07-2016, 10:28 AM   #41
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It's actually quite hard to imagine where the bottom would have been had markets been left to freefall.

And it's not at all hard to imagine that the response to a similar financial panic would be much more restrained if it were to happen again today.
I'm not so sure about that. Warren Buffet has said elsewhere he believes (paraphrasing) the more severe the crisis, the stronger the response from the government would be. In his FCIC testimony he also discussed how derivatives haven't considered the possibility of a terrorist attack. Again, were some sort of attack (i.e., nuclear device detonation) to occur near one's hometown, all bets are off.

My point is the quest for the holy grail in financial retirement security fails to consider other possibilities making it all a moot point anyway. William Bernstein has discussed this. No one is going to die if their PF blows up. We do have a safety net in this country, such as it is. Will your quality of life be downgraded? Yes. Substantially? Possibly. OTOH, I just read a couple of articles yesterday describing places where it is still possible to retire on the average social security check alone.

I believe it is possible to over think this stuff, and it is in the best interest of most in the "financial services" (to include financial information) industry to have us do so. We're a highly lucrative marketing target and it's best to remember this when playing the cat and mouse game of chasing financial security.
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Old 04-07-2016, 11:11 AM   #42
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we can all drum up visions in our head of devastating scenario's where nothing works . gold bugs have been doing that for decades .
how many times have you read on this forum something like - "FireCalc tells me I can take a 4% SWR but just to be safe I'll take 3%... or 2%... or even less" ?

At least the Fidelity Planner is based on actual measured data as opposed to pulling SWR rates out of thin air.
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Old 04-07-2016, 11:22 AM   #43
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Warren Buffet has said elsewhere he believes (paraphrasing) the more severe the crisis, the stronger the response from the government would be.
A lot has happened since 2008. One of the things that has happened is that attitudes about things like aggressive monetary policy, fiscal stimulus, bailouts, government intervention of any kind, etc. have all hardened in a way that would make a government response to a similar crisis much harder now than it was then. Even if the government had the same resources at it's disposal now, which it doesn't.

And it wasn't all that easy in 2008/09. The first attempt to pass TARP legislation failed.
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Old 04-07-2016, 11:34 AM   #44
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how many times have you read on this forum something like - "FireCalc tells me I can take a 4% SWR but just to be safe I'll take 3%... or 2%... or even less" ?
Folks who are struggling to find ways to get anticipated SWR from 6% down to 4% don't have that luxury.
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Old 04-07-2016, 11:35 AM   #45
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how many times have you read on this forum something like - "FireCalc tells me I can take a 4% SWR but just to be safe I'll take 3%... or 2%... or even less" ?
4% is based on a 30 year retirement with something like a 95% success rate. Most of us are planning an "Early Retirement." In my case, that started at the age of 38. I wonder how that 5% failure probability expands as we move from a 30 year time period to a 60 year one.

I know. So silly to think about such things.
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Old 04-07-2016, 11:51 AM   #46
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4% is based on a 30 year retirement with something like a 95% success rate. Most of us are planning an "Early Retirement." In my case, that started at the age of 38. I wonder how that 5% failure probability expands as we move from a 30 year time period to a 60 year one.

I know. So silly to think about such things.
Evidently my point is beyond you. FireCalc is already a very conservative model. And then many take that and make it much more so. My point was in reference to those that thought the Fidelity model was too conservative

FireCalc can and does model what you posted - ie long retirements.
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Old 04-07-2016, 12:02 PM   #47
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Evidently my point is beyond you. FireCalc is already a very conservative model. And then many take that and make it much more so. My point was in reference to those that thought the Fidelity model was too conservative

FireCalc can and does model what you posted - ie long retirements.
Deciding whether any model is conservative or not requires that you know how it actually works. And that was my initial point, which somehow seems to be "beyond" many folks here who would rather defend Fidelity's calculator as sufficiently conservative.
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Old 04-07-2016, 12:19 PM   #48
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Have you accounted for the probability and effects on your SWR of war and nuclear war/socialism and expropriation/Supernova/alien invasion/Ebola and Tika/Global Warming/population explosion ?

Perhaps you should spend nothing - just in case. Or maybe go back to work - Just in case. Or buy gold - lots of it - just in case.
Why do you seem so defensive about me posting the implied equity and bond returns embedded in Fidelity's calculator here?

Am I really not allowed to think that those scenarios aren't as rigorous as I'd like?
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Old 04-07-2016, 02:53 PM   #49
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Why do you seem so defensive about me posting the implied equity and bond returns embedded in Fidelity's calculator here?

Am I really not allowed to think that those scenarios aren't as rigorous as I'd like?
I'm curious: how do you think knowing Fidelity's assumptions will help you? So you could look under the hood, tinker with it, and then come up with an idea whether you "agree" with or "disagree" with them? This is my issue with all of these types of debates (if you want a real debate, head over to the BH forum where they have beaten the merits of various PF withdrawal methodologies to the grave and back--the VPW believers border on fanatic, IMO). It's this search for certainty that doesn't exist.

Even Fidelity states their calculator is an educational tool (aren't they all?). As I stated previously, any calculator is simply a data point. If you want to negate any calculator's results, attempt to account for the impact of the unknowable: SS/Medicare reform, tax reform, age of death, and low probability/high impacts. Bernstein has addressed this, Scott Burns has addressed it, and lately Dirk Cotton in his posts on bankruptcy.
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Old 04-07-2016, 02:57 PM   #50
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A lot has happened since 2008. One of the things that has happened is that attitudes about things like aggressive monetary policy, fiscal stimulus, bailouts, government intervention of any kind, etc. have all hardened in a way that would make a government response to a similar crisis much harder now than it was then. Even if the government had the same resources at it's disposal now, which it doesn't.

And it wasn't all that easy in 2008/09. The first attempt to pass TARP legislation failed.
True, but after that first attempt they did a lot of things. In fact, they did some things that had not been done before. As to future responses, I'm with Buffet on this.
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Old 04-07-2016, 03:09 PM   #51
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I'm curious: how do you think knowing Fidelity's assumptions will help you?
I'm curious why the answer to that question isn't obvious.

So you plug in a bunch of financial information into a calculator and it tells you "Great Job! You're Ready to Retire TODAY!!!" or maybe "Tough luck, you need to save another $2MM."

Do you think those are reasonable conclusions?

Is there anyway to know without having some idea how the calculator arrived at those results?

It's as simple as that.

And what about anything I've written here suggests I'm searching for some kind of certainty? I'm simply trying to understand how a tool arrives at it's results so I can decide whether it is a tool that I think is worth using.
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Old 04-07-2016, 03:50 PM   #52
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Well it's not obvious given the points I listed above. OTOH, I understand your desire, and I too would like to know Fidelit's assumptions, but I'm not sure how much good that will do, given what I stated above. Other calculators I've used, including i-orp, esplanner, financial engines, FC, firesim--and even a free financial plan from VG when it was available--have all been data points to me, nothing more (I have found Fidelity's outputs to be the most conservative, however). Other data points have included tax rate modeling, SS reform modeling, health care increase modeling, tax reform modeling, PF end life modeling, etc.

Point is, none of this--no calculator, no tool, even our own spreadsheets--is precise or exact, and can never be (obviously!). What do to? Same thing you did before retirement: best you can with as many inputs as possible, remaining flexible, responsive, adaptible.

It seems to me the statement "I'm simply trying to understand how a tool arrives at its results so I can decide whether it is a tool that I think is worth using", implies you are looking for certainty of some kind (aren't we all? why else bother with any of this?). If you do figure out Fidelity's assumptions, please be sure to let the rest of us know!
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Old 04-07-2016, 04:39 PM   #53
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It seems to me the statement "I'm simply trying to understand how a tool arrives at its results so I can decide whether it is a tool that I think is worth using", implies you are looking for certainty of some kind
Yup, you got me.

The guy who retired at 38 and has spent the last six years with no fixed address, no home, no car, no physical possessions of any kind other than what he can carry on his back; who sleeps in some 100 different beds each year; who seldom knows where he can get a cup of coffee in the morning or a bus to his next destination in the afternoon; who rarely speaks the local language - the guy who deliberately put himself in that position, what he really craves is certainty. Most of all he hopes against hope that he can find the certainty that he so desperately needs with Fidelity's Retirement Planning Calculator.

Yup. You got me all figured out.
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Old 04-07-2016, 07:44 PM   #54
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As you are intent on repeatedly missing the point , I'll leave it there.

Best of luck to you.
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Old 04-07-2016, 08:56 PM   #55
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As you are intent on repeatedly missing the point , I'll leave it there.
Seeing as how you are intent on repeatedly telling me what my own motivations are, I think that's best.
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