FireCalc

[PaperSniper]

What am I doing wrong? FireCalc indicates a LT 50% chance of success:

(All in k USD)

Annual expences 56
length 35 yrs
Nestegg start 900
Pension 1 starts year 0 30k
Pension 2 starts year 3 20k
SS starts year 5 17k
Spouse's SS starts year 7 7k
Stock/bonds(cash) 70/30


I plan to retire in 3-6 months. We will have no debt. My own planning indicates a very favorable percent of success. In addition to the above, I plan 18% average taxes, 4% inflation, ROI 7.5%. I thoght those were pretty conservative until I did Firecalc today!

 

[moguls]

I tried FIRECALC with your numbers and got 100% success rate. You may want to check to make sure you entered your pensions as negative values and your SS as positives. If you didn't that could significantly change your outcome.

Moguls

 

[cute fuzzy bunny]

Yes, assuming that you intend to replace portfolio withdrawals with pension/ss withdrawals (ie, reduce your withdrawal rate) rather than add those amounts to your 56k to create a higher overall withdrawal, then your success is 100%.

If you intend to increase your overall withdrawal (56k+pensions+social security) then your portfolio withdrawal rate (56k) is simply too high to be supported by historical data.

 

[PaperSniper]

Hmmmmmmmmmm. Looks like I didn't read the instructions good enough! How's that go" RTFI?

.....  You may want to check to make sure you entered your pensions as negative values and your SS as positives......
Moguls

 

[dory36]

Sorry for your brief panic!

This has happened often. I have just added Repeat - Enter your pension as a negative number, since you will need less from your portfolio. in red to the instructions.

Dory36

 

[Dogcliff]

Yo, Cptn' Bill;

How is it that 80/20 30yr Treas/Stock ratio leaves me with 660M left vs a 20/80 ratio only leaves me 3M (when I'm dead)? Are 30 yr treasuries that far superior to the stock market (I wouldn't guess so) ...or did I fatfinger the calc?

TIA,

dc :-/

You have proposed a withdrawal of 14.55% of your starting portfolio.

starting with a portfolio of $330,000 and taking out $48,000 the first year, and the same amount after adjustments for inflation (PPI) each year ...

Starting in year 7, the withdrawal was decreased by $600 (your Social Security; adjusted for inflation).

Starting in year 9, the withdrawal was decreased by $600 (spouse's Social Security; adjusted for inflation).

Starting in year 0, the withdrawal was decreased by $21,000 (adjusted for inflation).

Starting in year 5, the withdrawal was decreased by $20,000 (adjusted for inflation).

In year 1, the portfolio was increased by a single (inflation-adjusted) $50,000 addition (as from the sale of a house).

In year 1, the portfolio was increased by a single (inflation-adjusted) $225,000 addition (as from the sale of a house).

In year 1, the portfolio was decreased by a single (inflation-adjusted) $150,000 reduction (as for a major purchase).

 

[Bob_Smith]

Dogcliff,

One thing I noticed in your output is that the SS amount appears to be a monthly amount. If it is, you'll want to make that an annual amount.

 

[Dogcliff]

Hi Bob,

You are correct...thanks..now the result is 772m/5m for treasury weighted vs stock weighted mix.(?!?) Still doesn't sound quite right...

dc

 

[wzd]

Kind of strange. I get 2.2M (20% stock) vs 4.5M (80% stock) for a 30 year run. You didn't mention the run duration.

Wayne

 

[Dogcliff]

WZD,

35 year run...I cross-posted to
Early Retirement Forum
Early retirement planning
Technical Forum - Calculators
Question for Dory36 on FIRECalc

with both input assumptions and results cut 'n pasted from FIRECalc. Something is not right...

dc

 

[wzd]

Saw the cross post. It can make threads hard to follow, so I would discourage it, although I can't say Dory has a guideline on it here.

I run the same run and get totally different values, even for the 80% stock run, $6,684,877. For the 20% stock I get $3,015,846. These numbers are about what I would expect. Something is really hosed up for the 20% run for you, and I also wonder why the difference on the 80% run. I suspect Dory will have to look thru log files to see what is happening here (assuming that firecalc keeps them). Maybe if you post the full results text, someone may see something?

Wayne

 

[dory36]

Saw the cross post.  It can make threads hard to follow, so I would discourage it, although I can't say Dory has a guideline on it here.

I run the same run and get totally different values, even for the 80% stock run, $6,684,877.  For the 20% stock I get $3,015,846.   These numbers are about what I would expect.  Something is really hosed up for the 20% run for you, and I also wonder why the difference on the 80% run.  I suspect Dory will have to look thru log files to see what is happening here (assuming that firecalc keeps them).  Maybe if you post the full results text, someone may see something?

Wayne

I think he answered himself in the other thread - decimal point error on input.

Cross posting is allowed, as long as you don't mind someone answering you on the knitting forum.

No logs being kept. They would make debugging easier, but I decided privacy issues were more important.

Dory36

 

[John Lee]

Are the terminal values calculated in FIRECalc adjusted for inflation?
John Lee

 

[cute fuzzy bunny]

I dont believe so.

 

[dory36]

Nope - they are raw dollars. Maybe in a future version.

 

[cute fuzzy bunny]

There are a few calcs that will render out inflation adjustments, although they'd be generic rather than using the year by year inflation rates.

Besides, wouldnt that be depressing to see "average terminal value, $32, 530, 245...enough to buy two cups of coffee and a 15 minute newspaper rental in 2045"?

 

[Telly]

Well, now you guys are confusing me about FIRECalc...

Let's say I do a 40 year run, and look at the spreadsheet available at the "details". If the starting year of that particular row was 1940, isn't the $ amount in the last cell, 1979, in 1979 dollars? Therefore, the terminal value for that particular sequence is in the year's dollars of the last succesful year's cell in that row?

 

[wabmester]

Each sequence incorporates inflation for the years in that sequence, and the terminal value for each sequence is in the final year's dollars.

But that's difficult to interpret in terms of buying power.   And to confuse things even more, the "average terminal value" just averages each year's terminal value, none of which were comparable to begin with!

And to further confuse things, sometimes "inflation adjusted" means you get more money to reflect inflation (e.g., TIPS and COLA'd pensions), and other times it means that the dollars were converted to some fixed reference year for comparision purposes.

Not confused yet?  Intercst's spreadsheet allows you to look at terminal values in "inflation adjusted" terms, which in that case means he factors out inflation to give you "real" dollars.

 

[Telly]

Each sequence incorporates inflation for the years in that sequence, and the terminal value for each sequence is in the final year's dollars.

Thanks wab, that is what I wanted to hear!

For my own spreadsheet creations, I have put a "real dollars" column in them to make me realize that possible big terminal $ amounts 40-45 years out will be actually be a lot smaller than what they appear!  

Also have created and printed out a table that has inflation multiplier values.  Vert. axis is years, Horz. axis is inflation rates in .5% steps.  As an example, 3.5% inflation for 45 years is a mult. of 4.702.  6% over the same years is >13