|
FIREcalc- help wanted from those older than I
06-23-2014, 01:16 PM
|
#1
|
Recycles dryer sheets
Join Date: Jun 2014
Posts: 71
|
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.
4nursebee
Posts: 198
Joined: 1 Apr 2012
Location: US
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
06-23-2014, 01:25 PM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Feb 2006
Location: Alexandria, Va
Posts: 1,053
|
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.
__________________
Two roads diverged in a wood, and I - I took the one less travelled by...
|
|
|
06-23-2014, 01:34 PM
|
#3
|
Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,124
|
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.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
|
|
|
06-23-2014, 02:40 PM
|
#4
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,888
|
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?
-ERD50
|
|
|
06-23-2014, 05:36 PM
|
#5
|
Recycles dryer sheets
Join Date: Jun 2014
Posts: 71
|
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.
|
|
|
06-23-2014, 05:49 PM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
|
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.
|
|
|
06-23-2014, 06:16 PM
|
#7
|
Full time employment: Posting here.
Join Date: Jan 2014
Location: Austin
Posts: 661
|
Quote:
Originally Posted by ejman
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?
|
|
|
06-23-2014, 06:32 PM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,888
|
Quote:
Originally Posted by 4nursebee
...
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.
-ERD50
|
|
|
06-23-2014, 06:52 PM
|
#9
|
Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
|
Quote:
Originally Posted by Looking4Ward
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%
|
|
|
06-23-2014, 08:30 PM
|
#10
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
|
Quote:
Originally Posted by 4nursebee
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.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
|
|
|
06-23-2014, 09:38 PM
|
#11
|
Recycles dryer sheets
Join Date: Dec 2013
Posts: 390
|
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?
|
|
|
06-23-2014, 09:42 PM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
|
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.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|