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Old 10-21-2015, 03:13 PM   #41
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My mistake: I was thinking effective tax rate but said tax bracket. Your explanation makes sense, but the overall usefulness of this tool now remains suspect to me.
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Old 10-21-2015, 04:50 PM   #42
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This is still my goto planner, even with the tax "issue". I like the ease of use and the detailed expense planner built in.
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Old 10-21-2015, 04:53 PM   #43
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mine too . i find it one of the best .
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Old 10-21-2015, 05:38 PM   #44
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Ok - Some stuff must have changed because I had not had a shortfall for underperforming, prior. I went through and relooked at my detailed expense worksheet and had to add in (don't remember if I'd done this earlier) changes in expenses once the kids are off my healthcare, phone plan, etc. I also noticed that it treated my rental income a little different, but when I modeled it as a pension with joint survivorship and future dollars (inflation) it seemed to make more sense when I looked at the income through the years.

It definitely is a pessimistic view of the future, using the underperforming model. I barely squeak by to age 95 (small remaining portfolio.) If I change it to average - I suddenly am leaving my kids HUGE inheritances.

Question - the underperforming model.... Does that assume we'll have crappy returns for the full 40+ years of retirement? I guess that's as conservative as you get!!!!
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Old 10-21-2015, 05:45 PM   #45
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Question - the underperforming model.... Does that assume we'll have crappy returns for the full 40+ years of retirement? I guess that's as conservative as you get!!!!
Have the same question. Am going to look if they give any color to the two choices.
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Old 10-21-2015, 08:03 PM   #46
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This is still my goto planner, even with the tax "issue". I like the ease of use and the detailed expense planner built in.
The introductory message states it is an educational tool only, and should not be used for retirement or tax planning purposes. After rereading the tax section in the methodology, I find it even more useless. Tax assumptions, like fees or returns assumptions, affect everything from assumed returns to PF value to RMD's. Taken in totality, how can this be useful? As a guesstimate?

To Rodi's point in his question above, running the calculator last night and tonight my ending PF is somehow almost $50K less than it was last night, with no changes to the inputs. Did the calculator get even more conservative in the last 24 hours? Definitely a WTF moment.

I have concerns basing my financial future on any "educational" tool. It may as well be "for entertainment purposes only".
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Old 10-22-2015, 06:12 AM   #47
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I don't think you can rely on any of these "calculators" to be 100% IMHO. I have run it a lot of times over the last few days and it only changed when I changed input, but could just be me. I regularly run 3-4 of these tools and make my own choices based on my view of all the results, YMMV.

Use what you are comfortable with.
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Old 10-22-2015, 06:57 AM   #48
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Yes, and the merits/drawbacks of relying on the various calculators has been discussed here and elsewhere. I know many here use FIRECALC/CFIRE, Financial Engines (though not as much), etc., but I am uncomfortable extrapolating historical returns. I am also uncomfortable estimating future returns using calculators such as IORP due to behavioral bias. Same goes for spreadsheets.

FRIP is the most conservative I've seen, followed by ESPlanner, and both use MC analysis, which I'm comfortable with (despite, or perhaps because of, Otar). Their value to me is they provide a psychological cushion against worst case scenarios, such as a bad sequence of returns (having just retired, this is personally important to me). Now FRIP is no longer a part of that equation. YMMV.

One good thing to come out of this is I have decided to go back and do a more detailed analysis of tax expense in retirement, so it could be said Fidelity did me a favor.
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Old 10-23-2015, 07:51 AM   #49
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How to tell if you are in a "poor" market, or an "average" market: Use the report generated by this new RIP tool. Take a look at the columns showing "% of savings withdrawn" and "Ending Savings". Compare these two columns for the "under performing" table and the "average" table. The important part is that in an under performing market, the % withdrawals will be much higher. Even scary high. In my report, the DW plans to take SS at 62 and I plan to take it at 70. In the under performing market, my % withdrawal climbs steadily from 6 - 8% until I reach 70, then it drops back to 4%. In the average market, it starts off at 5.1% then gradually drops to 4.5% at my age of 69, then drops to 2.4% or less until we are both gone.

This % combined with total of investments provides a good barometer for continuously seeing if we are on track during our retirement.
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Old 10-23-2015, 08:54 AM   #50
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Originally Posted by Options View Post
The introductory message states it is an educational tool only, and should not be used for retirement or tax planning purposes.
Actually, it says
"We just wanted to remind you that the Fidelity Planning & Guidance Center is provided for your education only. You shouldn't use what you learn here as the primary basis for investment or tax-planning decisions."

A somewhat standard disclaimer.

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Question - the underperforming model.... Does that assume we'll have crappy returns for the full 40+ years of retirement? I guess that's as conservative as you get!!!!
Per the help. "An underperforming market is defined as the 90% confidence level of estimated future balances and/or estimated future income. The 90% confidence level represents "underperforming market conditions" with 10% of all hypothetical scenarios tested performing worse. This means that in 9 out of 10 market scenarios tested a hypothetical portfolio similar to yours performed at least as well as the results shown and 1 out of 10 performed worse than the results shown.

An average market is defined as the 50% confidence level of estimated future income. The 50% confidence level represents "average market conditions" with 50% of all hypothetical scenarios tested performing worse. This means that in 5 out of 10 market scenarios tested a hypothetical portfolio similar to yours performed at least as well as the results shown and 5 out of 10 performed worse than the results shown. For more details review the Methodology."
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Old 10-23-2015, 11:13 AM   #51
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I finally used the new and "improved" RIP tool to do something I'd been meaning to for some time: Construct a table of assets vs. start date of both pension (start age from 55 to 65) and Social Security (starting from 62-70).

Initially I used assets at "end of plan" (age 95 in my case) as my figure of merit. Unsurprisingly assets at 95 are significantly greater the more I delay SS. A bit more interesting was the effect of pension start age - almost nil, with a 1% variation from start ages 55-59 and falling about 5-10% if I delay further out to 65. This is consistent with my earlier "back of the envelope" calculation that I should delay my pension one year and start at 56, but I hadn't realized how weak the dependence was.

Anyway I still miss the old RIP, but playing around with multiple scenarios with the new one is kinda fun.

PS. I'm not relying on RIP as my be all and end all calculator, but when it shows my NW nearly constant to age 95 with a spend rate 50% greater than I project it does give me a bit of a warm and fuzzy feeling of security about jumping ship in a couple of months.
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Old 10-24-2015, 09:15 AM   #52
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I just ran RIP. It looks to be the exact same tool for me. Can anyone explain what's different? Maybe my access is still using the old tool. IDK
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Old 10-24-2015, 10:15 AM   #53
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I just ran RIP. It looks to be the exact same tool for me. Can anyone explain what's different? Maybe my access is still using the old tool. IDK
I did too, but the interface is completely different, not sure it still has the RIP moniker.

My numbers seemed the same but I always ran at 95% so I might be mistaken. Need to spend more time with the new improved* version.

*trying to be optimistic
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Old 10-24-2015, 12:33 PM   #54
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The introductory message states it is an educational tool only, and should not be used for retirement or tax planning purposes. After rereading the tax section in the methodology, I find it even more useless. Tax assumptions, like fees or returns assumptions, affect everything from assumed returns to PF value to RMD's. Taken in totality, how can this be useful? As a guesstimate?
I found some use - in both the original and this version of Fidelity's tool. The use was to test my assumptions, make me think of things in detail.

I've found that pretty much every calculator has some strengths, and some variation of features. By running as many detailed calculators as you can, you are forced to dive into the details of budget/spending, income sources, taxes, one time or variable expenses, etc... Firecalc doesn't address taxes at all, FRIP and Quicken Lifetime Planner do a fixed tax percentage, IORP gives you the opportunity to explore roth conversions and other future tax reduction strategies...

So far - there is no one size fits all... firecalc comes close for me, as long as I guesstimate my taxes accurately and increase my spending accordingly. But FRIP gave me value by allowing the budget details, and changes in budget line items to be addressed. As someone with kids still under roof - that's a big deal. (I have teen boys - I think it's safe to say that my food bill will go down sometime in the future.)
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Old 10-25-2015, 05:56 AM   #55
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I also noticed my expenses in retirement, which i carefully input and total about 92,300 a year show up as 115 k for the below market run and 123k for the average run. Is this all taxes? Seems high for 34 k pension and 50k divvies and cap gains for married/joint. Much higher than old rip.


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Old 10-25-2015, 07:17 AM   #56
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Firecalc doesn't address taxes at all, FRIP and Quicken Lifetime Planner do a fixed tax percentage
Rodi, I am trying to understand this better - "fixed tax percentage".

For FRIP, based on my reading of the methodology, I thought that the tax rate could be 15% one year, 25% another, based on what it thought the income would be.

As an example, if FRIP thought my income for 2015 was less than @94,000 it would use calculations of less than 15%. If FRIP thought my income for 2015 was $100,000 it would use calculations of less than 25%. And all these numbers were best estimates for FRIP of course.
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Old 10-25-2015, 09:11 AM   #57
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Did I miss something in the new FRIP? In the old FRIP there used to be various scenarios regarding the possible conversion of some of the assets to a SPIA. I didn't see this on the new FRIP.
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Old 10-25-2015, 11:34 AM   #58
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Do you have to be a Fidelity account holder to use RIP? Can't seem to find it on their website. My ER is based on ESPlanner, but would like to compare its results to RIP if able.
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Old 10-25-2015, 11:45 AM   #59
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Do you have to be a Fidelity account holder to use RIP? Can't seem to find it on their website. My ER is based on ESPlanner, but would like to compare its results to RIP if able.
Look under Retirement Planning > Planning & Guidance Center
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Old 10-25-2015, 06:07 PM   #60
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Do you have to be a Fidelity account holder to use RIP? Can't seem to find it on their website. My ER is based on ESPlanner, but would like to compare its results to RIP if able.
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Look under Retirement Planning > Planning & Guidance Center
You may have to create a username and password but not need to hold any funds. A username means you can save all your inputs next time you use the tool.
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