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01-05-2013, 04:33 AM
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#1
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Recycles dryer sheets
Join Date: Jul 2012
Posts: 52
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FIRECalc
Good day. Many here are familiar with FIRECalc and I enjoy running various scenarios of my (hopefully) nearing retirement. I'm curious, though, of potential issues I'm glossing over as I stare gleefully at a 100% success rate.
Suppose a set of assumptions show a 100% success rate in FIRECalc. What could still be an issue in your mind (that could derail your retirement financial success) - especially for early retiree's (late 40's in my case)?
A few things come to mind:
1. Health / Health insurance - Would my (or my spouse's) health fail leading to a huge out of pocket expenses? What will health insurance premiums be in the future? Certainly higher than in the past, which is what FIRECalc is based on.
2. Market returns outside of historical results - Suppose the market SEVERELY tanked and stayed down for a LONG period of time. Would your now reduced assets produce enough income?
3. Disease, famine, epidemics, civil war, etc. - No way to predict these so I suppose we just ignore the risks.....right?
Are there other potential issues that might undermine a 100% success rate?
Thanks.
jarts98
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01-05-2013, 06:08 AM
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#2
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Full time employment: Posting here.
Join Date: May 2007
Posts: 881
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4. Investing too conservatively to begin with.
5. Getting scared by a market downturn and selling stocks at the bottom.
6. You live a long, long, long time.
__________________
"It is better to have a permanent income than to be fascinating". Oscar Wilde
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01-05-2013, 06:52 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,003
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Asteroid
__________________
Numbers is hard
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01-05-2013, 06:57 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Posts: 11,701
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Zimbabwe style hyperinflation.
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01-05-2013, 07:10 AM
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#5
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Thinks s/he gets paid by the post
Join Date: May 2011
Location: South Eastern USA
Posts: 1,068
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Bad assumptions.
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01-05-2013, 07:12 AM
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#6
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,582
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Alien invasion.
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01-05-2013, 07:15 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2011
Location: NC Triangle
Posts: 5,807
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Zombies!
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01-05-2013, 07:16 AM
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#8
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Full time employment: Posting here.
Join Date: Jul 2011
Location: South Florida
Posts: 551
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Nomad
from Star Trek's 'The Changeling'
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01-05-2013, 07:19 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Macroeconomic shift of power away from the US, government insolvency, austerity and reduced consumerism domestically.
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01-05-2013, 07:23 AM
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#10
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,582
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In the case of zombie uprising we do have options
But you are correct that many will fall
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01-05-2013, 07:43 AM
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#11
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Thinks s/he gets paid by the post
Join Date: May 2005
Location: Texas
Posts: 1,038
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Divorce
__________________
In theory, theory and practice are the same. In practice, they are not.
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01-05-2013, 07:43 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
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Quote:
Originally Posted by jarts98
Good day. Many here are familiar with FIRECalc and I enjoy running various scenarios of my (hopefully) nearing retirement. I'm curious, though, of potential issues I'm glossing over as I stare gleefully at a 100% success rate.
Suppose a set of assumptions show a 100% success rate in FIRECalc. What could still be an issue in your mind (that could derail your retirement financial success) - especially for early retiree's (late 40's in my case)?
...
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Suppose some of those successful lines go down to maybe 20% of your starting retirement funds (after inflation) and then flatten or maybe go up a bit. Would you have been able to spend in those rotten return years or would you have drastically reduced your spending and even pulled back from your targeted AA?
There is a place to put down the minimum acceptable portfolio value at all times. It is on the "investigate" tab at the bottom.
When I run FIRECalc I put a value in there that will be something I can live with in a real life market meltdown. It might be 50% of my starting portfolio value. Still would be scary hitting that mark.
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01-05-2013, 07:51 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,360
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Wait a minute! You mean that FIRECALC doesn't take all those things into consideration?
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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01-05-2013, 07:57 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,003
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Quote:
Originally Posted by marko
Wait a minute! You mean that FIRECALC doesn't take all those things into consideration?
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You have to go to the "What could possibly go wrong?" tab and click on the appropriate disaster. Note that FIRECalc will only allow you to choose one since history shows one will be more than sufficient.
__________________
Numbers is hard
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01-05-2013, 08:04 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,360
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Now you tell me! After I did that and clicked on "Zombies", I find that I never should have RE'd!!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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01-05-2013, 08:09 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2011
Location: NC Triangle
Posts: 5,807
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Quote:
Originally Posted by marko
Now you tell me! After I did that and clicked on "Zombies", I find that I never should have RE'd!!
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We love zombies here - see the second Mayan Prediction thread!
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01-05-2013, 08:23 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,808
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Don't you think Jarts98 deserves some serious answers along with the humor?
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01-05-2013, 08:34 AM
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#18
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Recycles dryer sheets
Join Date: Feb 2011
Posts: 141
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Since health care is the biggest single expenditure in my planned retirement budget my biggest worry is that estimate. Also, my firecalc estimate includes some social security income which is another area of uncertainty.
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01-05-2013, 08:34 AM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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Quote:
Originally Posted by Lsbcal
Don't you think Jarts98 deserves some serious answers along with the humor?
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Post #9 was a totally serious answer.
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01-05-2013, 08:38 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,003
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Quote:
Originally Posted by Lsbcal
Don't you think Jarts98 deserves some serious answers along with the humor?
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Certainly, and as Mead said, she gave him one as did racy in post #2, plus others.
Truth is, trying to figure out "what else could go wrong" is an exercise in futility - the list is limitless and the future is unknowable.
__________________
Numbers is hard
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