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FIREcalc- help wanted from those older than I
Old 06-23-2014, 02:16 PM   #1
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FIREcalc- help wanted from those older than I

Couple 47/57
Firecalc with realistic input says 100% chance of success with maintaining current spending levels over 40 years
If we double current spending levels only one cycle fails over 40 years.
Unbelievable to consider the growth of money over time.

So my question:

So we have X amount of money, firecalc suggests after 40 years at current spending we would have between 8X and 37X? Have you or people you know observed this kind of growth in retirement?
Can you share specifics with $ or similar X figures and explain the amount of time for such growth?
It must be time to cut the cord to employers in 2015 (ie one more year for a pension).

Thank you for the kindness of a reply.
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Old 06-23-2014, 02:25 PM   #2
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Well, my numbers in FireCalc don't look that good, but, yes, it does show portfolio growth over time. It happens when you have saved way more than needed based on a 4% withdrawal rate (and depends on the assumptions you used).

If you have 99% success with double the money you plan to spend, I'd suggest you "overshot" your number.
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Old 06-23-2014, 02:34 PM   #3
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4 years of modest withdrawals (<3% on average) since retiring in 2010 and nest egg is 32% higher than when we retired. But, past performance is no guarantee of future success. A poor 4 years of returns at the start instead of the great returns we've had would be quite a different story.
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Old 06-23-2014, 03:40 PM   #4
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Quote:
So we have X amount of money, firecalc suggests after 40 years at current spending we would have between 8X and 37X? Have you or people you know observed this kind of growth in retirement?
No, that does not sound right.

When I enter $1M portfolio (for EZ math), and ZERO spending for 40 years, the average and max ending portfolio values are ~ 8x an 20x. The reporting of the min is a little flaky, it seems to report starting $ if the end>start, but it looks to be around 4x. At 8x to 37x, you are roughly double what I get with no spending at all.

One explanation - are your pensions and SS greater than your spending? Then you are adding to your portfolio, not depleting it at all.

And did you allow it to use historic returns (default), or did you pick and chose future returns and inflation?

If you are certain of the security of those pensions and your expenses (current spending is radically different from retirement spending for some), I'd be counting the days until departure, maxing vacation, etc. Is the 2015 a 'gate' of some sort? What if you were to leave, uhhhh, I dunno - say tomorrow?

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Old 06-23-2014, 06:36 PM   #5
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I used default settings except when I played around sticking with 75% SP 500 and 25% small caps.

I added in pension income x1 starting next year.
I added real estate income in 7 years.
I added in SS starting age 62 for one of us, 65 for the other.
My withdrawal rate starts less than 3% and decreases as time goes on.
Retirement account savings are in excess of 30 x annual expenses for decent comfort (no cycle failures). 18 x annual expenses if I live at a single cycle failure, which would be more than I have ever spent.

I think I understand the doubters but I was more so looking to here from others that retired years ago hoping to hear there accounts really have grown...folks in my neck of the woods don't retire with these kinds of assets.
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Old 06-23-2014, 06:49 PM   #6
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My portfolio has increased by 66% since I retired on 12/31/2002 at age 52. Both my wife and myself started taking SS at our respective age 62. No pensions. Living expenses come from the portfolio. AA basically a 50/50 mix with 10% reallocation bands. I.E do nothing until the band limit is breached.
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Old 06-23-2014, 07:16 PM   #7
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My portfolio has increased by 66% since I retired on 12/31/2002 at age 52. Both my wife and myself started taking SS at our respective age 62. No pensions. Living expenses come from the portfolio. AA basically a 50/50 mix with 10% reallocation bands. I.E do nothing until the band limit is breached.
I'm curious what your WR has been in terms of percentage?
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Old 06-23-2014, 07:32 PM   #8
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Originally Posted by 4nursebee View Post
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I think I understand the doubters but I was more so looking to here from others that retired years ago hoping to hear there accounts really have grown...folks in my neck of the woods don't retire with these kinds of assets.
It is so dependent on specifics, I'm not sure that anyone else's situation means much. I'm not sure what sort of 'confirmation' you are looking for?

Nobody here has retired at every point in history as FIRECalc reports. And it's hard to say if their other sources of income come close to yours. It's just unclear to me what you are looking for?

Can a portfolio grow over 40 years, especially if you don't withdraw much? Yes, just look at historical 30-40 year returns. FIRECalc and other sources have those histories, I'm not sure what anyone else can add.

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Old 06-23-2014, 07:52 PM   #9
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I'm curious what your WR has been in terms of percentage?
It varies by year but generally in the range of 3.5% to 4.5%. I did cut back expenses substantially in 2008 and 2009 as it seemed the world was coming to an end. Part of the reason for the early SS (at 62) is that it felt more comfortable to reduce withdrawals and leaving assets in to compound for what turned out to be a very rewarding period (2009 on).

I just recalculated the withdrawal rate for 2013 since both my wife and myself were getting SS starting that year. It was 2.5%
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Old 06-23-2014, 09:30 PM   #10
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Originally Posted by 4nursebee View Post
So we have X amount of money, firecalc suggests after 40 years at current spending we would have between 8X and 37X?
I had not run FIRECalc to 40 years, thinking 30 years was already way optimistic for me. But I just did it out of curiosity. It said I would end up with between 5X and 20X.

I doubt that if my portfolio grows to those amounts, I will continue to spend at the level I do now. So, the problem of "having money out the wazoo" will be self-limiting for me, I think.


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Old 06-23-2014, 10:38 PM   #11
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As an added twist, please correct me if off base, I'm pretty sure Firecalc results and chart are in today"s dollars.
Start with a million and your lowest line's endpoint is at $300K, with inflation over 40 years some where around 1 million in future dollars.
5X ≥ 15 million?
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Old 06-23-2014, 10:42 PM   #12
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Yes, FIRECalc results are in today's dollars. In real life, inflation will give us all more chances to be decamillionaire without going down to Mexico and dealing in pesos, even if our stash does not really grow.
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