FIREcalc rewrite - suggestions?

[dory36]

This week we got somewhat settled -- parked the RV on the outskirts of nowhere, TX, got a real phone and real internet (via microwave) for the first time since I retired, and are starting to get stuff put away.

Leaving [i]Dory[/] (the boat) was not too difficult, but watching hundreds of boats headed south, including dozens of boats we knew, was traumatic.

On the bright side, we got a music CD from a cruising singer, and found a song that can be the ER theme song. I've asked for the OK to put the whole song on this site, with a link to the order page. I won't say more until I get a response.

Dory36

[Feawen]

I hope that you can add a factor for people who have pensions, in addition to social security. I didn't know how to add that factor in.

Feawen

Feawen,

Just add your Pension to SS and use the same box or use Spouse SS box. Or use a withdrawal box and input a negative number.

Quite a few ways to do this. Be creative!

[dory36]

Cut-Throat is right. The purpose of the three withdrawal change boxes is to allow for pensions or the like. (They are no different computationally from the SS boxes, except that you have to option to indicate whether the pension is inflation adjusted or not.)

You enter your required living expenses - say $40,000.

Then using one of the withdrawal change boxes, you reduce your needed withdrawal by 25,000 in year 8 because that is when your pension for that amount will kick in. You indicate in the box provided if the pension is inflation-adjusted.

What will happen is your portfolio will be hit for $40,000 the first 7 years, then only 15,000 the 8th year, since your pension will make up the differnce.

Dory36

[wzd]

And to continue to beat a dead horse, please change one of the withdrawal boxes to add instructions on inputting a pension, and also retitle the box to indicate 'pension or other withdrawal adjustment'.

Wayne

[dory36]

You know, I get this question about once a week -- how do I enter a pension. It's all right there -- withdrawal changes 1-3.

But having seen that the floggings will continue until morale improves, I've modified the text to discuss pensions.

Not sure what that expression has to do with the topic, but I haven't used it since I retired 3 years ago, and it was getting lonely from disuse!

Dory36

[sgeeeee]

You know, I get this question about once a week -- how do I enter a pension. It's all right there -- withdrawal changes 1-3.

But having seen that the floggings will continue until morale improves, I've modified the text to discuss pensions.

Great. Right after you get that finished, can you tell us how to include pensions?

Just kidding . . .

[wzd]

Thanks Dory. I see the question come up quite often, so answering it in advance is the right thing to do. It seems obvious to us, but seemingly not to everyone.

I'll stop beating you with a wet noodle now. (and where did that expression come from?).

Wayne

[BunsGettingFirm]

I have already made the same suggestion over at the FAQ section, but the FIRE calc needs two nest egg entries, one for taxable and one for tax-deferred. For most, ER means retiring before 59, so it would be nice to know how long the taxable account will last and how much the tax-deferred account will be when I'm finally able to withdrawl from it.

[wzd]

I have used ORP, which is at www.i-orp.com, for that type of planning, and you may want to have a look if you haven't. It is more for planning withdrawals from taxable vs. non taxable accounts.

Wayne

Dory36,
- First--I'm new to the board and FireCALC--both are great.

- Potential improvements to FireCALC: I plan to take a fixed percentage of the ending portfolio balance from the fund each year (i.e. withdrawals will vary depending on portfolio results, not depending on inflation, etc. No chance to go broke, but available withdrawals will fluctuate each year and it's possible the balance will decline over the years if the % is too aggresive). I think this approach is fairly common. FireCALC is super now, but would fit my needs slightly better if I could input the % I plan to take of the ending balance (and the number of years/asset allocation) and then see some expression of how the portfolio can be expected to do relative to inflation (slowly decline? grow in true value?)and also how wild the fluctuations in annual available withdrawals are likely to be relative to an inflation-adjusted constant.

Thanks!

Mark W

Dory36,
- First--I'm new to the board and FireCALC--both are great.

- Potential improvements to FireCALC: I plan to take a fixed percentage of the ending portfolio balance from the fund each year (i.e. withdrawals will vary depending on portfolio results, not depending on inflation, etc. No chance to go broke, but available withdrawals will fluctuate each year and it's possible the balance will decline over the years if the % is too aggresive). I think this approach is fairly common. FireCALC is super now, but would fit my needs slightly better if I could input the % I plan to take of the ending balance (and the number of years/asset allocation) and then see some expression of how the portfolio can be expected to do relative to inflation (slowly decline? grow in true value?)and also how wild the fluctuations in annual available withdrawals are likely to be relative to an inflation-adjusted constant.

Thanks!

Mark W

Dory36,
- First--I'm new to the board and FireCALC--both are great.

- Potential improvements to FireCALC: I plan to take a fixed percentage of the ending portfolio balance from the fund each year (i.e. withdrawals will vary depending on portfolio results, not depending on inflation, etc. No chance to go broke, but available withdrawals will fluctuate each year and it's possible the balance will decline over the years if the % is too aggresive). I think this approach is fairly common. FireCALC is super now, but would fit my needs slightly better if I could input the % I plan to take of the ending balance (and the number of years/asset allocation) and then see some expression of how the portfolio can be expected to do relative to inflation (slowly decline? grow in true value?)and also how wild the fluctuations in annual available withdrawals are likely to be relative to an inflation-adjusted constant.

Thanks!

Mark W

[charlie]

Mark,

You can simulate withdrawal of a fixed % of the
ending balance each year by increasing the
expense ratio box to the desired amount and setting
the amount withdrawn box to zero.

Cheers,

Charlie

[dory36]

Charlie is correct - JWR1945 posted a great discussion on this at http://64.37.106.236/cgi-bin/yabb/Ya...num=1079049785

One approach would be to use the calculator in its normal mode to get to a nominal withdrawal rate (i.e., 3%, 5%, whatever) and then rerun it with zero withdrawals and the withdrawal rate (plus whatever expenses you have) in the expense column.

I will probably add a field soon for "percentage of portfolio withdrawal" or something like that - but it will simply get added to the expenses to do the calculations.

Unfortunately, at this point I am not sure you will get much really useful info out of the calculator when you do this, so I will need to also figure out how to usefully report withdrawals in inflation adjusted dollars. (Average? Average plus high and low? Average plus standard deviation?)

Dory36

[JWR1945]

Dory36

Unfortunately, at this point I am not sure you will get much really useful info out of the calculator when you do this, so I will need to also figure out how to usefully report withdrawals in inflation adjusted dollars. (Average? Average plus high and low? Average plus standard deviation?)

I recommend using a threshold. Most people have a minimum (real) dollar amount in mind, an amount that they must have. A person might enter such a threshold as a (real) dollar amount or as a percentage of the first withdrawal.

Have fun.

John R.

I hope no one minds if I revive this dormant thread - I am also new to FIREcalc and this board. The calculator page banner doesn't show a revision yet so I thought there might still be time for a suggestion?

I was interested to find that my 100% SWR is drastically higher if I take SS at 66 vs. 62. I assume that is because my time horizon goes a few years beyond the "simple" break-even point for benefits, and I am near the maximum benefit.

I know it would be a lot of work, but it would be great if the calculator could make the determination of the best time to start taking benefits (hopefully separately for two benefits). In other words, to maximize the 100% SWR over the worst-case timespan. Not the least of the complications is that the second benefit may be either primary or spousal, with different pre-full-retirement-age reduction rates.

I'm not sure if this is a practical suggestion but it seems to me that it falls within the purpose of the tool for identifyng and planning for the worst-case scenario. In any case, thanks for providing a super planning tool!

Best regards,
CC

[snowbird]

Dory36,

I just ran the following senario in FIREcalc:

Withdrawals: 40529
Starting Portfolio: 610000
Lifespan: 30
Your SS: 14000 starting in year 7
Spouse's SS: 7000 starting in year 8
Sell Your House: 100000 in year 16
Stocks: 30
Remainder invested: 5 yr Treasury
expenseE Ratio: 0.18
Inflation: CPI
First year withdrawal: checked
Results - Success Rate: 100%

Ran the same info except adjusted withdrawal by non-inflation adjusted pension income which should equate to the same withdrawal amount as above:
Withdrawals: 72000
Withdrawal Change 1: of -31471 starting in year 0
Results - Success Rate: 50.8%

Why?

Thanks,
Snowbird

[amt]

Dory36,

I just ran the following senario in FIREcalc:

Withdrawals: 40529
Starting Portfolio: 610000
Lifespan: 30
Your SS: 14000 starting in year 7
Spouse's SS: 7000 starting in year 8
Sell Your House: 100000 in year 16
Stocks: 30
Remainder invested: 5 yr Treasury
expenseE Ratio: 0.18
Inflation: CPI
First year withdrawal: checked
Results - Success Rate: 100%

Ran the same info except adjusted withdrawal by non-inflation adjusted pension income which should equate to the same withdrawal amount as above:
Withdrawals: 72000
Withdrawal Change 1: *of -31471 starting in year 0
Results - Success Rate: 50.8%

Why?

Thanks,
Snowbird

I just tried with your numbers at 72000. It's 100%.

[snowbird]

amt,

If you use inflation-adjusted $$$ I agree it's 100%. Since my pension is not adjusted, it comes out 50.8%.

Snowbird