FIRECalc Success Rate & RE

[Dtail]

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Originally Posted by DogGone I’m hours away from pulling the trigger after a month of fierce study. I am 52 so really want to be confident. After using many other models... I’d say the FireCalc result is consistent with my other models when using a balanced portfolio, not the default high stock exposure. With some effort and the 14 day trial period, I love NewRetirement ‘s model. The PlannerPlus option let’s you see all the details of the assumptions in spending/income by year and most importantly let’s you time phase changes, see details to ensure inflation is hitting your inputs as expected, etc. The big downside is you have to input an optimistic and pessimistic range for rates of return, inflation, etc... no Monte Carlo, though apparently planned. You can also save multiple scenarios, like “lose 25% in crash” and easily toggle between them. I found Vanguard Best Egg and Fidelity way to optimistic.

Fidelity used to be in general the most conservative, but they changed their medical inflation down to 4.9% which is still higher than the generic inflation used by other calculators.
However, they seemed to have changed something else which isn't apparent to me, but my numbers apples to apples have gone higher in the last 3 months relative to the other calculators (not due specifically to market gains).

[HI Bill]

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Originally Posted by tb001 Ha! You understand! I've looked into the bucket strategy, but then if you model keeping a % of portfolio in cash, that 100% is even farther away!!

A little. But if you keep 90% in equities, rathern than, say, VG's recommended max of 65%, not so much different. I have 90/5/5, and the firecalc results are similar to having 80/20.

[HI Bill]

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Originally Posted by DogGone I found Vanguard Nest Egg...way to optimistic.

This one's based on Monte Carlo, so I think it gives similar results to other calculators, but doesn't factor in SS, Pension, or other income outside of your "savings balance today". I really like the MarketWatch calculator. You can add SS, pension, extra spending, etc., and it models draw-down based on your activity level, inflation, and future changes in spending. But it over-allocates housing costs, and this is largely not adjustable.

https://www.marketwatch.com/calculat...ing-calculator

[COcheesehead]

Quote:

Originally Posted by Dtail Fidelity used to be in general the most conservative, but they changed their medical inflation down to 4.9% which is still higher than the generic inflation used by other calculators. However, they seemed to have changed something else which isn't apparent to me, but my numbers apples to apples have gone higher in the last 3 months relative to the other calculators (not due specifically to market gains).

Interesting. I noticed mine went up a bit, but chalked it up to increasing assets.

[SecondCor521]

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Originally Posted by tb001 I'm curious what % success rate people feel comfortable with, and what age you plan to, especially given the current market conditions. A 95% success rate in FIRECalc feels pretty good, but is it *really* 95% after an extended bull market, given SORR... I know the answers to this Q will vary tremendously depending on risk tolerance, age, buffer, etc... but am curious to hear the responses. FWIW, in FIRECalc, we're at 88% with most aggressive assumptions (no downsizing, live to mid-90s, high spend level with fair amount of extras), 95% assuming we cut our [padded] budget by about 5% and live to 90, and 100% if we add in a downsizing to that last scenario. I'm having trouble pulling the trigger, I think mainly because I know how stressed I will be in a downturn. After watching our investments grow and adding money year after year, the thought of pulling money out is pretty stressful, especially given where the markets are right now. I find myself wanting to hit that 100% success rate for our most aggressive assumptions, but filled with dread at the thought that the market may take a turn for the worse in the interim and leave us stuck w*rking through a recovery, just to get back to where we are now.

I'm 49, single, FIREd 3 years, and have three kids 24, 19, 17. I'm quite logic-oriented and comfortable with risk. AA of 93/7. I would feel comfortable with a spend rate that would have been 95% historically safe for 40 years. I spend far less than that and need to work on spending more.

Note that FIREcalc already includes SORR, because it iterates the planning period over each start date. So when it comes up with 4% (or whatever), that's 4% assuming you started at the worst SORR we've seen so far.

At the end of the day, you rolls your dice and you takes your chances. I think looking at in terms of regret is helpful: Which would you regret more - working another X years to get to 100% and then realize you didn't need it, or retire early and risk having to cut back or go back to work?

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Originally Posted by Rianne I pad the spending, big time. Keep pushing it higher to stay within 100%. If left with $100K at the end, so be it. Interesting, the VG Nestegg, using Monte Carlo simulation, which is similar to firecalc, does not want to give you 100%. Unless your SWR is super low. It's like they don't want you to feel confident.

FIREcalc is a historical-based calculator. VG is a Monte Carlo simulator. They are similar in that they both provide data about retirement readiness, but how they do so is quite different. IME, Monte Carlo simulators tend to be a percent or two more conservative than historical calculators.

[pjigar]

I am in 100% camp. Nothing else works for us.

[Looking4Ward]

Next month will be five years that I've been Fire'd. Wow, that sure went by fast.

I always shoot for a 100% success rate but my other parameters might be considered a bit unorthodox - I set the sample period to begin in 1938 and I use a 25 year time interval in order to include more cycles.

I then pay close attention to the projected account balances at the end of the term for all cycles. In every case, they are higher than what I started with. And that's with a current withdrawal rate of more than 4%.

If I throw in SS the picture looks even better. I'd say that five years ago I was a bit nervous with the projections but now that my portfolio is actually larger than what I started with I'm a little more comfortable with the numbers and will sometimes see what FireCalc says with a 95% success rate (both in terms of annual withdrawals and beginning portfolio) but I've never tested lower than that.

[Dtail]

I also remember reading a thread awhile back whereby IIRC @Mathjak was making a case that if one has only a 95% Firecalc success vs. 100% success, it does matter in that if one is at a 95% success rate, then one's failures include the worst years to retire (1966, 1907, 1929, etc).
So even though one doesn't know the future for sure based on the past, wouldn't one at least want to "survive" the worst known historical years to begin retirement?

I thought it was an interesting argument.

[HI Bill]

I'm shooting for a 100% success rate, but that's with a spending level that is 2x my annual expenses (e.g., 50% discretionary spending for travel). So, I'm projecting retirement at 50X my annual expenses saved. However, the actual plan is to spend at a 4.4% WR for the first 10 or so years so that I can travel, assuming no really bad SORR takes place. If they do, I'll deplete the cash bucket first, and if after 3 years, nothing's recovered, will cut spending, as I suspect many will.

Or use VPW.

[pb4uski]

95% is fine IMO.

[DogGone]

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Originally Posted by HNL Bill This one's based on Monte Carlo, so I think it gives similar results to other calculators, but doesn't factor in SS, Pension, or other income outside of your "savings balance today". I really like the MarketWatch calculator. You can add SS, pension, extra spending, etc., and it models draw-down based on your activity level, inflation, and future changes in spending. But it over-allocates housing costs, and this is largely not adjustable. https://www.marketwatch.com/calculat...ing-calculator

Are these future saving in Future Dollars? I wish they’d all state more clearly or allow to toggle.

[slowsaver]

I get 100% success rate from Firecalc. Still don't feel I can retire yet, mostly because my expense estimate assumes I will get 95% of my health insurance premium paid-for by an ACA subsidy. What with pending lawsuits, I don't believe it's a sure bet.

[COcheesehead]

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Originally Posted by slowsaver I get 100% success rate from Firecalc. Still don't feel I can retire yet, mostly because my expense estimate assumes I will get 95% of my health insurance premium paid-for by an ACA subsidy. What with pending lawsuits, I don't believe it's a sure bet.

That’s a risk I wouldn’t take. How do you fare, paying your own way?

[slowsaver]

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Originally Posted by COcheesehead That’s a risk I wouldn’t take. How do you fare, paying your own way?

Well, I can certainly get a quote for insurance now -- but I feel it's kind of useless, given that I'm 45 and DH is 55. There is no way the rate will grow at any predictable rate (e.g. normal inflation rate), if past performance is any predictor.

[COcheesehead]

Quote:

Originally Posted by slowsaver Well, I can certainly get a quote for insurance now -- but I feel it's kind of useless, given that I'm 45 and DH is 55. There is no way the rate will grow at any predictable rate (e.g. normal inflation rate), if past performance is any predictor.

Oh, thought you were closer to FIRE.

[slowsaver]

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Originally Posted by COcheesehead Oh, thought you were closer to FIRE.

Closer to FIRE, or closer to the age I can get medicare?

[COcheesehead]

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Originally Posted by slowsaver Closer to FIRE, or closer to the age I can get medicare?

Don’t understand.

[HI Bill]

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Originally Posted by DogGone Are these future saving in Future Dollars? I wish they’d all state more clearly or allow to toggle.

Under the Retirement Spending Tab, there's a check box for "Show in Today's Dollars". Toggle away! I leave it checked.

[candrew]

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Originally Posted by pb4uski 95% is fine IMO.

"The other 50% is physical" ~ Yogi Berra

[EastWest Gal]

I’m a real Nervous Nellie, all because of health insurance. I “retired” in 2014. I helped our medical group off and on, but in July 2016 I stopped working entirely. Our HI premiums doubled between 2016 and 2017, and then Congress tried to gut the ACA. I went back to work for HI. The entire time FireCalc says 100% success rate, even with high HI premiums.

But working is literally killing me. I gained back the weight I lost. It’s very stressful. I’ve stabilized and transferred several children to pediatric ICUs. I can feel the physical tightening in my neck and chest as I drive to work, especially for night shift.

Two dear friends have breast cancer. We have lost others in our lives who are younger than us. I need to quit and take care of me. Otherwise I won’t live until the projected 90+ age I use for FireCalc.

Keep in mind your life is more important than X travel budget when fussing between 95% and 100% success rate. You can still be happy spending a little less.