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Old 12-08-2008, 08:25 PM   #21
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Yes. And just to be safe, cut whatever it says by 50%.
Yeah, DW will be thrilled.
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Old 12-08-2008, 09:13 PM   #22
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Has unclemick seen this picture as an example? Look at the LCD TV!

By the way, it was sent to me as an E-mail attachement about "taking it with you". No explanation, so I don't know where it came from. Thought I just pass it on.

HEH HEH HEH ...

Gee, I am turning into a younger unclemick...


Maybe that's what they mean by "crab mentality"? If I can't enjoy it anymore, neither can you!

I want to be cremated, so should they just pile up all my furniture, put me on top and strike a match? What about the stuff that cannot be reduced to ashes (gold, silver, etc...), should it be buried with my remains? I ain't leaving nothin' behind...

The ancient Egyptians sure did believe you could take it with you, but hey, I am not betting against the oracle of KC... He seems to know his stuff.
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Old 12-08-2008, 11:31 PM   #23
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I'm at about a 24% withdrawal rate, but I'm not retired yet, and not withdrawing at the moment... :-)

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Old 12-09-2008, 05:49 AM   #24
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If I retired today, using a life expectancy of 90, and my "comfortable but not luxurious" expense projections, I would be at a 3.7% WR, and 97.9% success expectation. If on the other hand I use a life expectancy of 85, the expectation of success drops to 94.9%. I didn't try adding in SS because I never use it for my FIRE planning. If it is there when I'm 62+, it will be play money. If not, I will not have expected it anyway. This does include a windfall that I have earned and will be received and invested in Q1 next year. The above is what I keep posted in my head just in case I wake up one morning, decide I can't take anymore, and spit the dummy.

I have a slightly more luxurious spending plan, and two lower spending plans, each very do-able, although the lowest would require us to sell our dream home, and move to a less costly location...which would boost the portfolio and give us more to spend (it is really just a worst case scenario contingency plan that is still very liveable). The first level lower spending plan gets us 3.25% WR and 100% success on current port. The lower one, after selling the McMansion and buying something in the 3000' range, would put us at about 2.3% considering the cost of living in the location we are considering for the contingency plan. The more slightly luxurious plan is sitting right on 4% at the moment, but that includes the ongoing expenses associated with a couple of toys I would like to buy, and would need to save for before FIRE (don't have the toys yet).

I'm shooting for FIRE in 2-3 years with an SWR of about 3.2-3.4%, on my slightly more luxurious spending plan. I guess I could pull the plug when DD graduates in June, but there are those couple of toys I'd like to have as I enter the world of ER...and the economic uncertainty kind of makes me want to hang onto the income from w*rk just a bit longer.

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Old 12-09-2008, 08:17 PM   #25
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If I retired today, using a life expectancy of 90, and my "comfortable but not luxurious" expense projections, I would be at a 3.7% WR, and 97.9% success expectation. If on the other hand I use a life expectancy of 85, the expectation of success drops to 94.9%.
How does your success rate drop if you die earlier? I would have expected the opposite....

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Old 12-09-2008, 08:24 PM   #26
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How does your success rate drop if you die earlier?
oh i don't know. could it be because...

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it seems nothing more than a crap shoot to take long term averages and apply them to short term lives.
so the longer you live, the better the chance that your success rate will correspond the longer term averages. while the shorter your life span, the better chance you have of, um, crapping out.
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Old 12-09-2008, 09:43 PM   #27
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Originally Posted by Rambler View Post
If I retired today, using a life expectancy of 90, and my "comfortable but not luxurious" expense projections, I would be at a 3.7% WR, and 97.9% success expectation. If on the other hand I use a life expectancy of 85, the expectation of success drops to 94.9%.
R
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How does your success rate drop if you die earlier? I would have expected the opposite....

2Cor521
I've seen the same thing, and it can be explained (and I think it has from time to time).

Let's say you are 50 YO and you use a life expectancy of 90, so you need a 40 year analysis. In 2008, FireCalc cannot use any runs from the years 1968 on, because you would not get a full 40 years of data.

But, if you are 50 YO and you use a life expectancy of 85, you need a 35 year analysis. In 2008, FireCalc can include 5 more runs from the years 1968 to 1973, and get a full 35 years of data in those runs.

So, if that longer time period you choose excludes some bad years, it can seem safer than a shorter run which *can* include that bad streak.

Counter-intuitive for sure, but that is what I've come to see from the tool.

-ERD50
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Old 12-10-2008, 04:59 AM   #28
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I've seen the same thing, and it can be explained (and I think it has from time to time).

Let's say you are 50 YO and you use a life expectancy of 90, so you need a 40 year analysis. In 2008, FireCalc cannot use any runs from the years 1968 on, because you would not get a full 40 years of data.

But, if you are 50 YO and you use a life expectancy of 85, you need a 35 year analysis. In 2008, FireCalc can include 5 more runs from the years 1968 to 1973, and get a full 35 years of data in those runs.

So, if that longer time period you choose excludes some bad years, it can seem safer than a shorter run which *can* include that bad streak.

Counter-intuitive for sure, but that is what I've come to see from the tool.

-ERD50
Exactly. The system, while great (and probably the best free one I have seen), is not completely flawless because it relies on past data and requires full sets of data to return an answer. That's why I run it with different life expectancies, and that's why I am targeting a relatively low SWR...ya know, belt and suspenders kinda guy.

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Old 12-10-2008, 06:44 AM   #29
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I haven't re-run FireCalc but it did occur to me that it would be interesting if it had a "context analyzer". Let's say that 5% of the tested periods have the portfolio failing, what is the probability that the current economic environment would weight that 5% higher or lower than average or something like that. Can patterns be found around the performance past data that would permit this?
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Old 12-10-2008, 03:25 PM   #30
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Well, to be honest, I haven't run firecalc in 3 or 4 years. I was 100% at that time and my stash is essentially unchanged from a year ago - and quite a bit more than when I did run firecalc last. My WDR was quite low (IIRCC 2.3% but I'm actually way below that for now) based on my very low equity position. I wonder if I ran firecalc now if I would need a lower WDR for 100% since my (already small) equity position is even smaller due to the recent unpleasantness. I think that would count as a perverse outcome. 3-4 less years to live, more money in stash and yet lower WDR because I've been too conservative. Ironic.

But, I'm working toward increasing equities now that I'm converting Trad to Roth. Could be a good time to do so with equities off 40% +/-. We'll see.

Rambler, I'm with you on the belt and suspenders. I go so far as to get the suit with 2 pair of pants. Wait. I don't own a suit. Oh well, you get the idea. Back ups to my back ups is what I'm trying to say.
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Old 12-11-2008, 12:42 AM   #31
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I'm down from a solid 100% a year ago to about 80% now, but that's over 60 years. Tightening the belt a little bit gets me to 100%, but I think it's pretty meaningless over a 60 year period.

Unfortunately, I'm not FIRE'd yet so hopefully my spending $'s at 80% will continue to go up before I pull the trigger. Funny, just before the market really went south, I was one missed meeting away from giving notice (but my boss was out of town that day). That day, the market crapped out big time and game me the jitters, so I'm still suffering from 'just one more year'...or in my case, 'just 6 more months'
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Old 12-11-2008, 01:24 AM   #32
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Still 100%. But I was late to realize I could go and then had a rather good year before this @#$%^&* that we have had lately.

FWIW, either LYBM or "means exceeded wants" means that our FC SWR is higher than what we want to spend.

YMMV
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Old 12-11-2008, 06:41 PM   #33
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If you think about it why would you rerun FIRECalc? First of all, the success rate is not the whole picture. What if you go down to 40% of your start portfolio before going back up? Will you be able to live with that result as being success? If so then fine. But your spending rate in that scenario will be way up from your start spending rate. Now what if it goes to 10% of the start value? Your spending rate may be quite high at that point. Will you be experiencing sleepless nights?

Our expense rate is well up from the start of 2008. But I initially ran FIRECalc and looked at the worst case drawdowns with the spreadsheet results. The worst was about 35% of the portfolio left before starting back up (1966 retirement to 1982 low). Have not got there yet and am already loosing a little sleep. Just have to find little areas to cut back on and the dog is going on a diet too . Today DW bought crab at $6 a pound and I found a sale on our favorite wine at Costco -- hows that for a solution!
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Old 12-12-2008, 01:24 PM   #34
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Still 100% for me, RE'ing early in 2010 at 55 with 40yrs of expenses planned. I do expect SS to be there for me but, like Rambler, I tried running it with no SS and still at 100%.
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Old 12-12-2008, 02:53 PM   #35
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Still 100% for me, RE'ing early in 2010 at 55 with 40yrs of expenses planned. I do expect SS to be there for me but, like Rambler, I tried running it with no SS and still at 100%.
That's wonderful!!

It never really occurred to me to try it, since I am already 60 and so I don't foresee any problems with SS for me. I discovered that with no SS my probability of success is reduced from 100% to 97.3%, but I can get 100% if I lower my expenditures by about $70/month. That's doable.
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Old 12-12-2008, 03:03 PM   #36
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It never really occurred to me to try it, since I am already 60 and so I don't foresee any problems with SS for me. I discovered that with no SS my probability of success is reduced from 100% to 97.3%, but I can get 100% if I lower my expenditures by about $70/month. That's doable.
You are going to be just peachy. SS is going to be around in its current form long enough for you to be safe, or my name isn't ...... damn, what is my name?
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Old 12-12-2008, 04:08 PM   #37
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You are going to be just peachy. SS is going to be around in its current form long enough for you to be safe, or my name isn't ...... damn, what is my name?
I agree - - I am sure SS will be around until, well, until h*ll freezes over, or at least until it snows in New Orleans! Oh that's right - - it did that yesterday, and even more up there in BR.
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Old 12-12-2008, 04:15 PM   #38
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Couldn't believe how much snow we got here on Thursday. The photo is from our apartment early Thursday morning before I went to work. Many inches deep on the car, still lots of snow coming home from work - families of snowmen in yards along the side of our road, and this morning, STILL snow on the ground and roof tops.

So, never say never...
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Old 12-12-2008, 04:17 PM   #39
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I agree - - I am sure SS will be around until, well, until h*ll freezes over, or at least until it snows in New Orleans! Oh that's right - - it did that yesterday, and even more up there in BR.
I took mine early and spending it all - cause the Saint's lost in overtime - hope there will be 'some' left for youse peoples. .

If not - just remember - pssst Wellesley.

heh heh heh - .

P.S. Just BBQ'd Black Angus burgers on the back patio - our little snow from a few days ago is gone.
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Old 12-12-2008, 04:21 PM   #40
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100% If it starts to go down, I'll just kick off a little sooner than expected.
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