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Re: FIREcalc criticized in blog
Old 07-24-2005, 02:06 PM   #21
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by dbr
Maybe an interesting addition would be to calculate the joint probability of running out of money and still being alive.* For example a sixty year old contemplating retirement could multiply the failure rate from FIRECALC for a 30 year duration (say 5%) by the chance of being alive at age 90 (say 10%) to get a probability of disaster (being alive and having no money) of only 0.5%.* In actuality some sort of accumulated percentage needs to be calculated as once one runs out of money or once one dies at any age, one does not then recover.* In other words, the conditional probability porblem needs to be correctly formulated.* I am simply suggesting that running high rates of financial survival to time periods with low rates of life survival is kind of a strange approach to retirement.

If one is going to do statistics on the finances one should also do statistics on the longevity, it seems to me.
It's been done.

http://www.retireearlyhomepage.com/swrlife.html

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Re: FIREcalc criticized in blog
Old 07-24-2005, 05:13 PM   #22
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by Cut-Throat
I have suggested to Dory that a 'safety Valve' such as this could be built into FireCalc. Like Cut Spending X% after a Y% Market Downyear. Increase X% Spending after a Y% Market Upyear. I'll bet the SWR could be increased substaintially!
It's been done (thanks to SG):

http://www.retireearlyhomepage.com/c...num=1107790433
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Re: FIREcalc criticized in blog
Old 07-24-2005, 05:23 PM   #23
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by Cut-Throat
I have suggested to Dory that a 'safety Valve' such as this could be built into FireCalc. Like Cut Spending X% after a Y% Market Downyear. Increase X% Spending after a Y% Market Upyear. I'll bet the SWR could be increased substaintially!
I am wondering about a conceptual discrepancy when Firecalc is combined with a longevity calculator.

As several have mentioned, Firecalc is a worst case planning tool, not an estimating tool. For those new to these discussions, let me use an analogy:

If someone were to claim an ability to predict the temperature in St Louis for August 13, 2007, he would universally be recognized as a charlatan. But if someone were to say that, based on recorded history, you could be safe leaving your heavy winter clothing at home that day -- everyone would see that as a blinding flash of the obvious.

Could there be a new ice age? Sure. But not too likely.

THAT kind of prediction is what Firecalc and Intercst's spreadsheets offer.

Now, turn to longevity. Now we are tring to predict a lifespan. Just as problematic -- everyone is different, medical advances, etc. *Besides, there is good reason to believe that the E-Rs will outlive their otherwise identical employed counterparts, for lots of reasons which can be explored in a separate thread.

So to stay with the model Firecalc uses, we'd have to incorporate a"worst case" *longevity calculator that says something along the lines of "there's negligible chances of you living beyond age 110."

I think that most of the longevity factors that are used in most models will affect the mean lifespan, but because of the high variance, will be pretty useless for predicting individual cases.


Besides... You have to understand that the bulk of Firecalc was built while I was still working, and thus had plenty of time to do such things.

All my spare time has vanished since I retired. *To make major changes now would require that I go back to work, so I'd have more free time!

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Re: FIREcalc criticized in blog
Old 07-24-2005, 06:33 PM   #24
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by dory36
Besides... You have to understand that the bulk of Firecalc was built while I was still working, and thus had plenty of time to do such things.
All my spare time has vanished since I retired. To make major changes now would require that I go back to work, so I'd have more free time!
Hey dory, maybe retiring wasn't such a good idea, if it eliminated all of your spare time.
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Re: FIREcalc criticized in blog
Old 07-24-2005, 07:09 PM   #25
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Re: FIREcalc criticized in blog

Hmmm

Take another look at Dory/grandchild posted on the other thread - and then decide if you really want to ask that question.

Heh, heh, heh

Perhaps FIREcalc can wait.
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Re: FIREcalc criticized in blog
Old 07-24-2005, 07:27 PM   #26
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by MJ
Hey dory, maybe retiring wasn't such a good idea, if it eliminated all of your spare time.
The problem with spare time is that
you only have it when you have nothing to do :
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Re: FIREcalc criticized in blog
Old 07-24-2005, 10:19 PM   #27
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
The problem with spare time is that
you only have it when you have nothing to do :
Well, I do mostly nothing all day and I am left with very little spare time to do nothing else.
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Re: FIREcalc criticized in blog
Old 07-25-2005, 03:57 AM   #28
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Re: FIREcalc criticized in blog

Quote:
Originally Posted by Cut-Throat
This is the post of the Year! - While it is funny, it is also very true. I am currently very worn out from from traveling and fishing the last two weeks and tomorrow I have to start packing to go on "vacation" to Glacier Park. - Maybe I can get my wife to drive, so I can get some sleep!
I agree! A classic!

JG
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Re: FIREcalc criticized in blog
Old 08-02-2005, 03:31 PM   #29
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Re: FIREcalc criticized in blog

Just curious if anyone has looked at this calculator

http://www.gummy-stuff.org/sensible_withdrawals.htm

Seems very interesting to me for 2 reasons:

it has the ability to adjust withdrawals based on portfolio performance in a rational way

it provides more money when younger and tapers off when older, which seems to make sense.

Bosco
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Re: FIREcalc criticized in blog
Old 08-02-2005, 03:35 PM   #30
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Re: FIREcalc criticized in blog

All kinds of Gummy Stuff is usually a good read.
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Re: FIREcalc criticized in blog
Old 08-02-2005, 06:03 PM   #31
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Re: FIREcalc criticized in blog

If they dont like the stock market, does that make them "Gummy Bears"?

Boy, that spreadsheet is crazy.
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