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FireCalc - What is your % now?
12-08-2008, 09:06 AM
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#1
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Full time employment: Posting here.
Join Date: Jun 2008
Posts: 534
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FireCalc - What is your % now?
As 2008 comes to a close many of us have seen and discussed how much our respective protfolios declined. This has certainly been unsettling for many in ER. Having made the transition from full time wage slave to semi-ER in April 2008 the large decline in the markets has been an attention getter!!!
Thankfully I have a LBYM lifestyle and there was a lot of cushion for me to try an ER. FireCalc gave me a 100% probability of success based on my parameters this spring. I take some assurance that even with a portfolio taking a 23% drop due to the market decline I am still at 99.1% as of yesterday. this uses the same withdrawal amount and years of expected retirement. I am thankful to see that.
I realize that my Firecalc prediction in April is what it was going into my ER but it is good to see a high probability of success if were starting ER today after the fall.
So with that said, if you run Firecalc today with your current balance what do you get for a % and does it give you confidence or create more anxiety?
__________________
Never surrender what you really want for what you want right now.
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12-08-2008, 09:24 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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I was at a 3% withdrawal rate, now I'm at 4%.
And I think combined with with careful tax loss selling this year and the capital losses realized by mutual funds going forward, the taxes on that 4% will be lower than usual for the next couple of years which gives me a little extra.
I used to feel really comfortable with what my portfolio could support. Now I just feel "safe", but that's better than the alternative!
Also, my "cash cushion" bucket is really helping me weather these horrible market conditions, because I don't have to withdraw from my retirement fund until 2011.
Audrey
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12-08-2008, 09:24 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,635
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Still 100%.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
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12-08-2008, 09:32 AM
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#4
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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I'm still at 100% and while I was feeling queazy when the market was tanking I'm still okay at 4% which has a lot of padding in it . I could do 3% but why should I ?
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12-08-2008, 10:11 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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At the beginning of the year I was at 2.75%. Now I'm at 3.75%. Most of my fluff is gone as are my (for now) 'big ticket' spending plans. The good news is that so far interest and dividends exceed my living expense needs.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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12-08-2008, 10:46 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Since I am will not retire for another 11 months, I used Firecalc to determine how much I could spend with 100% probability of success, given my own situation, asset allocation, pension, and so on.
It tells me I could spend about 3.4% of what I have now. I was planning to begin ER by spending less than that anyway, at least until I get my feet wet.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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12-08-2008, 12:00 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 3,895
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i now have about as much faith in retirement calculators as i do in churches.
__________________
"off with their heads"~~dr. joseph-ignace guillotin
"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
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12-08-2008, 01:10 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by lazygood4nothinbum
i now have about as much faith in retirement calculators as i do in churches.
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Leaving church out if it, how have retirement calculators disapointed you?
What promises did they ignore?
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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12-08-2008, 01:43 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 3,895
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seeing a thing as it is and not as you have imagined it to be does not disappoint but enlightens.
i'm not sure i understand your question "what promises did they ignore." perhaps if i only used the church as a social gathering place, and not for prayer.
i have not been a student of economics for long, only for these past two years of early retirement so i realize that i don't know much. this has been quite the two year education. from what little i can see, i wonder if a paradigm is changing.
it seems nothing more than a crap shoot to take long term averages and apply them to short term lives. it all sort of depends when you hop on the ride. never mind that those averages only include, as only they could, the past and so do not take into account potential future conditions such as, say, the looming $50 trillion dollar deficit the u.s.a. will likely face in my lifetime. i can not even wrap my brain around such numbers. perhaps if the calculators added a hyperinflation button to push. can you say 2% swr? i simply don't know how anyone puts faith in that.
__________________
"off with their heads"~~dr. joseph-ignace guillotin
"life should begin with age and its privileges and accumulations, and end with youth and its capacity to splendidly enjoy such advantages."~~mark twain - letter to edward kimmitt 1901
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12-08-2008, 01:54 PM
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#10
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by shotgunner
So with that said, if you run Firecalc today with your current balance what do you get for a % and does it give you confidence or create more anxiety?
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100%, same as before. Our spending has dropped a bit over the last six years, though, so that helps maintain a margin of safety.
I retired in June 2002, so our ER started at a minimum portfolio with a slim margin of safety. The next five years nearly doubled the portfolio, and now we have a rental home with a bit of cashflow. So I keep ramping up our spending projection until FIRECalc drops to a 95% success ratio, and then spouse & I discuss what we'd have to do to force our spending up to that level. Heck, we're spending more time discussing refinancing our mortgage(s) than on figuring out ways to spend more money. But we've boosted our charitable donations, which makes us feel better.
When the Dow's over 14,000 it's impossible to figure out how you & spouse would feel during a recession. The spontaneous exclamations of "Woo-hoo!" really derail the discussion. But in times like these it's a lot easier to have the "How do you feel about..." talks and then decide what you'll do for the next 30-40 years. In our case, instead of automatically reinvesting dividends we'll be more likely to let them pile up and then use them to value-average rebalance every year or two. But if we feel like taking money off the table, it'll be a lot easier to do. This tactic will knock a percent or two off of our future portfolio performance, but we've already shown (through not one but two market freefalls) that we have "enough".
__________________
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Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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12-08-2008, 03:32 PM
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#11
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Full time employment: Posting here.
Join Date: May 2007
Posts: 549
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Down to 82.2% with just the portfolio....but it looks like
social security will save me IF it's still there in 2017 !
...and I probably should add that in order to assure
my success, I need to die by the time that I am 84 ......
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12-08-2008, 03:45 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,674
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Still @ 100%, which surprises me in a way. But after rethinking my situation I realize that my DB plans as well as SS are really lowering my needs (income-expenses) in fact I could increase my expenses by 50% w/o causing a ripple in my Plan.
Since expenses are the easiest thing for me to control, I'm not sure how I could actually increase my expenses.
__________________
Part-Owner of Texas
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx
In dire need of: faster horses, younger woman, older whiskey, more money.
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12-08-2008, 03:47 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Jan 1, 1993. aka before FireCalc I think. So I run it once in a while to feel warm and fuzzy and then go to my current rule of thumb:
Somewhere between the SEC yield of my portfolio (usually 3% or higher) and 5% variable depending on my mood for the coming year - el cheapo or expansionist. Gloom and doom wise probably more toward cheap in 2009.
I did cheat post Katrina and took 6% in 2006. Theoretical purity is not one of my strongpoints.
I also play with ORP and then then do what I do - takeout wise.
heh heh heh -
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12-08-2008, 03:51 PM
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#14
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Quote:
Originally Posted by mickeyd
Still @ 100%, which surprises me in a way. But after rethinking my situation I realize that my DB plans as well as SS are really lowering my needs (income-expenses) in fact I could increase my expenses by 50% w/o causing a ripple in my Plan.
Since expenses are the easiest thing for me to control, I'm not sure how I could actually increase my expenses.
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I'm not sure, but there is this rumor going around... apparently you can't take it with you... You may have to check with Unclemick on that.
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12-08-2008, 05:29 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
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I was at 100% early in August -- I'm down to 82% now. But I'm still planning to retire in April. I've got enough cash to last several years, and enough padding in my retirement budget to comfortably cut back a bit on spending.
Coach
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12-08-2008, 05:30 PM
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#16
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Quote:
Originally Posted by FIREdreamer
I'm not sure, but there is this rumor going around... apparently you can't take it with you... You may have to check with Unclemick on that.
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The $100 bills, tightly wrapped around the shafts of the flaming arrows, are what make them burn so brightly.
__________________
*
Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."
I don't spend much time here— please send a PM.
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12-08-2008, 06:45 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
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Wish I knew which were FIRECALC and which were SIRECALC...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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12-08-2008, 07:05 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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I ran firecalc when I retired 2 years ago and it said 100%. Are we supposed to re-run the #'s now or just go based on what it said at retirement? I was just going to go to the 95% rule next year on spending.
Don't think I want to know what it would say with today's #'s.(heh)
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12-08-2008, 07:13 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by FIREdreamer
I'm not sure, but there is this rumor going around... apparently you can't take it with you... You may have to check with Unclemick on that.
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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 attachment from a friend about "taking it with you". No explanation, so I don't know where the picture came from. Thought I just pass it on.
HEH HEH HEH ...
Gee, I am turning into a younger unclemick...
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12-08-2008, 07:13 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by 73ss454
I ran firecalc when I retired 2 years ago and it said 100%. Are we supposed to re-run the #'s now...
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Yes. And just to be safe, cut whatever it says by 50%.
__________________
Numbers is hard
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