FIRE success rate

[DEC-1982]

I remember reading years ago that equity returns will be much lower, like 4-6% and yet here we are in an ongoing bull market. "They" really have no clue.

A perfect example of how nobody knows the how future returns will be.

 

[MichaelB]

A few thoughts.

I find it often helps to read all the posts in a thread before posting myself.

FIRECalc max success rate is 100%. The posts touting a higher number were tongue in cheek. Most everyone got that.

Major Tom, that was a very nice post. Thank you.

We’re a friendly group here, polite and respectful discussion with friendly disagreement are our most important characteristics.

 

[NW-Bound]

Y'all made me run FIRECalc again.

It says that at my spending rate in 2017, I can increase it 2.5x (future SS is included).

And if I continue at that 2017 rate, my stash will be 5x larger in 15 years in the best case.

Yet, in the worst case, it stays the same!

Such is the vagary of market returns.

 

[Shanky]

To get to 200% Firecalc, those who were conservative and consistent with their savings, worked an extra 6 to 8 years beyond what they needed to for 100%. I was not willing to give up the best quarter of my retirement years for that feeling of security.

(for those with an unexpected windfall, this situation is understandable. To correct they just need to up their spending or charitable giving.)

 

[MissMolly]

The 1920's were in the 20th century, not the 19th. Just saying....

 

[audreyh1]

A few thoughts.

I find it often helps to read all the posts in a thread before posting myself.

FIRECalc max success rate is 100%. The posts touting a higher number were tongue in cheek. Most everyone got that.

Major Tom, that was a very nice post. Thank you.

We’re a friendly group here, polite and respectful discussion with friendly disagreement are our most important characteristics.

Yep. Of course they were having fun!

 

[43210]

I call total BS on the claims of FIRECalc outputting success rates like 110%, 200% etc.

Why are people saying this BS? And why would anyone believe it? Maybe they don't know what it means.

I think what you're saying is that if historically, a certain WR led to success 100% of the time, there is no way that WR could have been successful any more times. I get that, but to use the language you used, and "call BS on it" is a bit harsh, in my opinion. As daylatedollarshort is saying, if someone has 80K income, but only spends 40K, saying that they have a 200% success rate is merely a way of expressing that. We understand what they are saying, and that's what matters, surely?

This forum has long been characterized by civil discourse, and I for one prefer the spirit of understanding my fellow forum members, than "calling BS on them" - unless they are purposely peddling untruths, in which case it is warranted. Such scoundrels deserve to be sent packing

A little understanding goes a long way.

This is an extremely cruel and nasty personal attack, and I am deeply hurt by it.

I am trying to help people by alerting them to the fact that there are serious misunderstandings about the output of retirement calculators.

While there were some ">100%" comments made in jest by posters who knew what's going on (and who should lighten up on my wording, which simply tries to convey the message), there are clearly several posters who absolutely did not get it, and possibly still do not get it. Read the thread carefully and you'll see several posts indicating serious misunderstandings

There are potentially very serious consequences for these misunderstandings. I did the right thing trying to set the record straight, and I don't appreciate being attacked for it.

 

[MichaelB]

Why don't you give it a rest.

 

[Ready]

My 200% comment was intended to mean 100% success rate at 2X my current annual spend. My apologies if this created any confusion.

 

[MichaelB]

My 200% comment was intended to mean 100% success rate at 2X my current annual spend. My apologies if this created any confusion.

I think that's they way most people understood your post.

 

[Major Tom]

This is an extremely cruel and nasty personal attack, and I am deeply hurt by it.

I am trying to help people by alerting them to the fact that there are serious misunderstandings about the output of retirement calculators.

While there were some ">100%" comments made in jest by posters who knew what's going on (and who should lighten up on my wording, which simply tries to convey the message), there are clearly several posters who absolutely did not get it, and possibly still do not get it. Read the thread carefully and you'll see several posts indicating serious misunderstandings

There are potentially very serious consequences for these misunderstandings. I did the right thing trying to set the record straight, and I don't appreciate being attacked for it.

If you're genuinely interested in helping to correct misunderstandings, then the best approach, I'm thinking, would be to quote the specific posts that you think are missing the mark, and attempt to explain, kindly, where you think they are going wrong.

Most folk come here to share their knowledge and to learn from others. If there is an alternate point of view, or something someone says is just flat-out wrong, the majority of folk here welcome the input, but it has to be explained to us. Saying things like "I call BS" and "Do you get it yet?" are not helpful.

To use your own words, "Do you get it yet?"

 

[Cessna152]

My 200% comment was intended to mean 100% success rate at 2X my current annual spend. My apologies if this created any confusion.

I think that's they way most people understood your post.

I’m afraid that also puts me in the minority, then, of those who didn’t understand whence came the greater than 100% success rates (but was too lazy to ask; if I followed up asking questions of every forum post that I didn’t understand I’d be on the internet 27 hours a day.)

As to FIRE Calc, of the three calculators I’ve used (Fidelity’s, Pralana Gold, and FIRE Calc) it seems to yield the most optimistic results for our particular retirement plan and isn’t able to handle simulation of some of the permutations I was interested in exploring.

 

[43210]

...alternate point of view...

Could you please clearly spell out what this refers to. In the context if this thread, what exactly is it that you are referring to as "point of view" and what exactly is it that you are referring to as "alternate point of view". What statement(s) are you characterizing as "alternate"? What facts are you disputing?

 

[43210]

...if I followed up asking questions of every forum post that I didn’t understand I’d be on the internet 27 hours a day.

Yes, but if you're retired 48 hours per day, then you'll still have plenty of time left over.

 

[REWahoo]

Could you please clearly spell out what this refers to. In the context if this thread, what exactly is it that you are referring to as "point of view" and what exactly is it that you are referring to as "alternate point of view". What statement(s) are you characterizing as "alternate"? What facts are you disputing?

I think a definition is in order:

 

[FI_RElater]

Yes, but if you're retired 48 hours per day, then you'll still have plenty of time left over.

....but there’s only 100 minutes in an hour and 40 hours in a day

 

[daylatedollarshort]

Yes, but if you're retired 48 hours per day, then you'll still have plenty of time left over.

Ready stated pretty clearly in the post above the 200% post was meant to imply being able to spend twice what they were and still get 100% in firecalc, which is what many posters here assumed was the intent.

The Fidelity readiness score goes to 150, meaning one could spend 50% more than what was input, but that seems to be the highest it goes. Any safer spend rates just gets ranked 150+.

 

[NW-Bound]

When I went to school, there was no A+ grade. The top grade was an A which was a 4.0 and that was it. I recently learned that there are schools that now have an A+ grade which is more than 4.0.

Of what use is that, one asks. Surely, it helps in that if you score an A+ in a class, it would help another class where you may get just a B+. The average of the two brings you back up to an A.

I say FIRECalc output should be changed to award 200% to those who are chintzy, er, frugal.

 

[Major Tom]

I say FIRECalc output should be changed to award 200% to those who are chintzy, er, frugal.

For some of the more financially conservative types around here, that could be a decidedly bad thing. You just know there'd be a few poor souls caught in an endless OMY loop, due to the perceived need to hit a 500% success rate before feeling comfortable quitting work!

I'm not entirely sure I wouldn't be one of them

 

[HMMY]

I think the meaningfulness of the success rate depends on the budget. You are better off with a lower success rate at a budget where you could painlessly reduce 20% of expenses (wants) versus a higher success rate at a budget where you need every penny to keep the lights on and food on the table (needs).

My goal was +95% success with a comfortable budget that can absorb some cuts. I'm pulling the plug in a few weeks with a 99% Firecalc success rate that includes SS; however, my portfolio is 27x expenses without SS AND my budget is pretty fatty. See you on the other side of FIRE.

 

[rodi]

When I went to school, there was no A+ grade. The top grade was an A which was a 4.0 and that was it. I recently learned that there are schools that now have an A+ grade which is more than 4.0.

Of what use is that, one asks. Surely, it helps in that if you score an A+ in a class, it would help another class where you may get just a B+. The average of the two brings you back up to an A.

Hijack

It's worse than that on grades... There are weighted classes - and the weights have different values. IB and AP courses give 5.0 for an A. (As well as possible college credit.) Honors courses go up to 4.5 points for an A.

This has caused grade inflation. We toured colleges this past summer and one of the data points provided was median GPA of admitted freshman. All of the colleges we looked at had median GPAs above 4.0. Most in the 4.1-4.3 range. These were public schools, albeit better/sought after ones. (Cal Berkeley, UCLA, Cal Poly SLO, UCSB).

This means you not only need to get straight A's - You need a large proportion of weighted grades with straight A's. My older son has 6 weighted classes, 2 unweighted. (I tried to talk him out of such an intense schedule)... But if he can pull off enough A's it will help him qualify for these schools.

 

[GravitySucks]

My 200% comment was intended to mean 100% success rate at 2X my current annual spend. My apologies if this created any confusion.

I was hoping you were going to explain that you got it to output 100% financial success while living twice as long.

 

[imoldernu]

Probably totally offtopic, but just for fun, I plugged in my portfolio and expenses as of my retirement date 29 years ago.... and came up with a 70% success rate.
Current numbers show 100%. Whether frugality or just dumb luck, it all worked out, and current assets are almost exactly the same as in 1989.

 

[REWahoo]

Probably totally offtopic, but just for fun, I plugged in my portfolio and expenses as of my retirement date 29 years ago.... and came up with a 70% success rate.
Current numbers show 100%. Whether frugality or just dumb luck, it all worked out, and current assets are almost exactly the same as in 1989.

A 70% success rate is not bad, and your success supports the information FIRECalc provides is historically reliable.

Thanks for being a test case.

 

[6miths]

100% plus. Built in room to leave a legacy.