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Old 02-10-2014, 12:10 PM   #21
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Even a 95% gives me confidence to live as I do now. It's the unknowns which are not baked into calculation that worries me - prolonged LTC, e.g.. Then, the question becomes how much to pad my RE fund for life's uncertainties. It comes down to 2 years more at megacorp or take the risk and RE sooner.
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Old 02-10-2014, 12:20 PM   #22
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It's the unknowns which are not baked into calculation that worries me - prolonged LTC, e.g..
Me too. Both my parents had dementia, so this is a particular concern for me. I am not married and have no kids, so don't know who I could rely on to get me into care if my mind starts to fall apart.

My plan for LTC is - I have no plan. Still not sure what to do about this.
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Old 02-10-2014, 12:31 PM   #23
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I use firecalc but I couple it's use with fido. I've looked at other calculator programs but these are the two I am most comfortable with. YMMV.
+1

I don't "pad" per-se but I do include a worst case scenario of paying the full OOP max for healthcare (12.6k for a couple, as it stands today). I also hold aside $100k for LTC (I don't have insurance), $70k for "bucket list vacations" that would otherwise not fit into the travel budget, and another $100k as a starting balance for "accrual type" expenses (major home repairs such as a new roof, replacement autos, etc).

I also only include 67% of expected SS benefits for both DH and I as I suspect I will have some portion which is taxable. My tax budget also assumes that 70% of my spending comes from pre-tax sources.

Ok - so maybe I do pad

I have 120% of what I need per FIRECalc and FIDO gives me a 90% chance of my portfolio lasting to age 93. This is a marked improvement from 1 year ago, where I was at 95% in FIRECalc and 88 years old in FIDO so I'm glad I did the extra year. I "think" that if I stay at the confidence levels that I see today then I will finally ER in March. OMY syndrome is a tough disease !
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Old 02-10-2014, 12:52 PM   #24
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I use firecalc as a guideline as well. I try to build in lots of alternative plans, but I am also cognizant of the fact that the clock is ticking and I will drop dead at some point.
Agreed. Naturally risk-adverse and conservative, despite planning every last detail over the course of my life I have been hit every kind of adversity. Older, I've learned that I always get back up no matter what, so bring it on. Life is for the living, not the fearful.


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This is very realistic. But I still look at investing as a quasi-perpetual endeavor.

...

Ha
Over the course of my financial life, I've been flexible as my work/spending/personal situation ebbed and flowed, and this will remain true in ER. Darwin: "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change."

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Me too. Both my parents had dementia, so this is a particular concern for me. I am not married and have no kids, so don't know who I could rely on to get me into care if my mind starts to fall apart.

My plan for LTC is - I have no plan. Still not sure what to do about this.
No LTC plan here and no intention for it either. Alzheimers runs in the family. Plan is to throw food tantrums in some run down nursing home til they overmedicate me and carry me out on a stretcher...

I should add that for my PF, although I'm at well over 100% success for FC, I use about 5 others as well. Next month, I'll add ESPlanner to the mix and be done with it.
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Old 02-10-2014, 12:53 PM   #25
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I am somewhat (OK, very!) cautious and conservative when it comes to retirement planning. I have spent too much time poor already in life, and don't want to take much risk of ever being there again.

I regard FIRECalc to be another data point among many, a good one albeit one that is a bit on the optimistic side for me. I would likely suggest not retiring if a forum member could not obtain at least a 95% successful outcome using FIRECalc.

As for my OWN retirement, well, er.... right now I am spending 55% of what FIRECalc says I can afford to spend until age 100 with a 100% success rate. I am planning to increase my spending up to at least 75%, maybe more (woo hoo? ). But honestly, I don't expect anybody else to forge ahead quite that gingerly when determining their own budget. I have my own fears and demons to deal with.
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Old 02-10-2014, 01:08 PM   #26
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Major Tom, regarding LTC from the BH site:

Bogleheads • View topic - "The dangers of long-term care insurance"
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Old 02-10-2014, 01:56 PM   #27
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Thanks - and I realize now that we were mostly talking at cross-purposes, due mainly to my fuzzy thinking. Although I have thought on occasion about the cost of long term care, my main concern is more with the practicality of it i.e. who is going to pick my sorry behind up off the floor and cart me into a home if and when I go ga-ga, as well as taking care of whatever paperwork needs to be done?

That thread confirmed what I suspected - that I'll probably have enough to cover the cost of a few years of LTC without purchasing a separate policy. I'm such a loner though (and the only family members who are close by and would be willing to help out, are older than me), that I could end up without anyone to put me in a home should I need to go into one.

So, although it may sound a bit irresponsible to some, for the time being at least, I'll cross that bridge when I come to it. More likely, I'll miss the bridge, fall down the embankment and end up in the water wondering what happened to my glasses and false teeth!
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Old 02-10-2014, 03:22 PM   #28
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Thanks - and I realize now that we were mostly talking at cross-purposes, due mainly to my fuzzy thinking. Although I have thought on occasion about the cost of long term care, my main concern is more with the practicality of it i.e. who is going to pick my sorry behind up off the floor and cart me into a home if and when I go ga-ga, as well as taking care of whatever paperwork needs to be done?

That thread confirmed what I suspected - that I'll probably have enough to cover the cost of a few years of LTC without purchasing a separate policy. I'm such a loner though (and the only family members who are close by and would be willing to help out, are older than me), that I could end up without anyone to put me in a home should I need to go into one.

So, although it may sound a bit irresponsible to some, for the time being at least, I'll cross that bridge when I come to it. More likely, I'll miss the bridge, fall down the embankment and end up in the water wondering what happened to my glasses and false teeth!
Actually, I'm on the same page as you and in the same situation. I don't intend to account for LTC because they'd probably leave my behind on the floor no matter where I was.
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Old 02-10-2014, 03:28 PM   #29
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And that is the dilemma. You can continue saving for many extra years to create the illusion of safety in retirement or you can retire years earlier with "risk." It definitely becomes a personality test as someone mentioned earlier.

My opinion is that "failure" of most reasonable plans will be something that wasn't considered and probably couldn't have been predicted. The US dollar could collapse, the US loses a major war, plague, pestilence and famine. Think Germany after WWI and II...Japan after WWII....Venezuela after Chavez (the fun continues ) or any of the other disasters to a national currency and infrastructure. Having a 100% safe FireCalc or 163% of the 100% safe asset level won't spare you from the collapse.
True, but not sure what conclusion you're driving at with your last sentence?

As you know, Dr W Bernstein famously discussed this issue The Retirement Calculator from Hell, Part III. His conclusion still makes sense IMO.

All 5 parts are worthwhile reading for most retirees, especially for keeping calculators in perspective. They help, but they don't guarantee anything or give "right answers."
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Now, let’s return to the above table. The historically nave investor (or academic) might consider reducing his monthly withdrawals to a very low level to maximize his chances of success. But history teaches us that depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for political, economic, and military reasons relative to the failure of banal financial planning.

Mind you, this is not a call for wild abandon. The above table constrains the retiree desiring a theoretical 97% success rate (of portfolio survival) from spending more than 3% per year of the initial real amount of his nest egg. Taking the accident propensity of the species into account would allow him to spend about 4%. But if you believe that we’re about to encounter a bad returns sequence or simply wish to leave a few baubles to your heirs, you’re right back to 3% again.

So live a little, and enjoy your money, for tomorrow we may be consumed by the ghosts of Hitler, Lenin, and Attila the Hun. And at withdrawals of 3% to 4% of your nest egg, don’t spend it all in one place.
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Old 02-10-2014, 03:44 PM   #30
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So, although it may sound a bit irresponsible to some, for the time being at least, I'll cross that bridge when I come to it. More likely, I'll miss the bridge, fall down the embankment and end up in the water wondering what happened to my glasses and false teeth!
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Actually, I'm on the same page as you and in the same situation. I don't intend to account for LTC because they'd probably leave my behind on the floor no matter where I was.
That makes three of us. I figure I can only worry so much about things. I try to manage the things I can and gave up on the things can't.
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Old 02-10-2014, 03:47 PM   #31
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True, but not sure what conclusion you're driving at with your last sentence?

As you know, Dr W Bernstein famously discussed this issue The Retirement Calculator from Hell, Part III. His conclusion still makes sense IMO.

All 5 parts are worthwhile reading for most retirees, especially for keeping calculators in perspective. They help, but they don't guarantee anything or give "right answers."
Another excellent response, Midpack. I might add another "fools errand" might be possibly overestimating one's longetivity (as in my case, planning for well over 100% PF success and PF end at 95 when chances are quite high I'll see an end of life before I'll see that PF end date).
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Old 02-10-2014, 03:55 PM   #32
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I was going to post the link to Berstein's article, but Midpack beat me to it, and with a better quote than I would have posted.

But I just keep in mind that with Firecalc, just as with many other things in life, "Past performance is no guarantee of future results." Backtesting various scenarios using historical data only goes but so far, especially when the historical data goes back about three or four times the duration you're analyzing.

So, I'm working OMY.
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Old 02-10-2014, 03:57 PM   #33
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At the end of the day, I will go into RE with my eyes wide open whether I have 80% or 100% firecalc number.
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Old 02-10-2014, 03:57 PM   #34
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I use FireCalc as one source of information. I also ran some Monte-Carlo simulations using other retirement planners, and did my own SS calculations. I trust the results in the context of "Trust but verify" every year or two. If some exogenous factor upsets the plans, then I will pivot and and run a new route. At some point, when I feel I don't have what it takes to 'verify' I might just put it all in PSSSSTTT.....Wellesly and collect the income.
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Old 02-10-2014, 03:58 PM   #35
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It's a useful tool for me. However it's just a starting point, There are too many variables in the future to blindly follow any calculator. I view retirement as the start of a new adventure not the end of working and planning.
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Old 02-10-2014, 04:00 PM   #36
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No LTC plan here and no intention for it either. Alzheimers runs in the family. Plan is to throw food tantrums in some run down nursing home til they overmedicate me and carry me out on a stretcher...
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So, although it may sound a bit irresponsible to some, for the time being at least, I'll cross that bridge when I come to it. More likely, I'll miss the bridge, fall down the embankment and end up in the water wondering what happened to my glasses and false teeth!
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Actually, I'm on the same page as you and in the same situation. I don't intend to account for LTC because they'd probably leave my behind on the floor no matter where I was.
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That makes three of us. I figure I can only worry so much about things. I try to manage the things I can and gave up on the things can't.
Hmmmm, DH and I are in the same situation. Maybe we can start a "will you take care of my sorry butt" support group where we make a pact to watch out for each other ?
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Old 02-10-2014, 04:15 PM   #37
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Hmmmm, DH and I are in the same situation. Maybe we can start a "will you take care of my sorry butt" support group where we make a pact to watch out for each other ?
If you have a DH you're already an order of magnitude above me and, I believe, MajorTom. I have a Dachshund.

Instead of a "will you take care of my sorry butt" support group, why not just a simple tontine? The last one standing gets the money.
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Old 02-10-2014, 04:20 PM   #38
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FireCalc is just a planning tool. There are no guarantees. There are events possible that no person or tool can predict.

However, I have read that people who actually look at their finances, budget (however loosely they might do so), and use tools like FireCalc (and the other similar ones) are usually more successful. The success probably comes from actively attending to their finances rather than seeing 100% success rate in FireCalc.

Louis, I am chalking this up as a typo.
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Ass Razztazz mentioned, I also round up on expense ratio.
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Old 02-10-2014, 04:47 PM   #39
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I retired four years before joining this esteemed forum, so I did not know about FireCalc before I jumped ship. I used my previous two years of expenses, a few other simple retirement calculators and my own best guess to decide. I'm in my seventh year of retirement, so far, so good !
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Old 02-10-2014, 05:34 PM   #40
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If you have a DH you're already an order of magnitude above me and, I believe, MajorTom. I have a Dachshund.
I think your Dachshund will be of more use than my 3 cats - but only marginally.

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Instead of a "will you take care of my sorry butt" support group, why not just a simple tontine? The last one standing gets the money.
I don't think it's the money any of us are bothered about - it has more to do with who is going to shovel us into a home when we're not able to do it for ourselves. Better start training that little doggie!
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