Handling pensions and SS in Firecalc

[SecondCor521]

OK, for those of you with pensions and/or Social Security, how do you handle those in Firecalc?

I see three approaches:

1. Reduce expenses. Put your real nest egg into Firecalc. Subtract your annual pension or SS amount from your actual expenses and enter the resulting number in Firecalc as your expenses.

2. Increase nest egg. Put your real expenses into Firecalc. Multiply your annual pension or SS amount by some multiplier (like 14x or 25x), add that amount to your bond portfolio, and enter the resulting nest egg into Firecalc.

3. Use advanced Firecalc and trust it to do the right thing. I think this is sort of a variant of 1, but with the advantages of better modeling what really would have happened historically.

Please vote above for all that apply.

Background: I want to use Firecalc for my parents. They have SS (his), SS (hers), a small government pension, and their nest egg. I'm not sure which of the above is the best approach.

2Cor521

[bosco]

I have yet to find any calculator that can correctly handle my pension situation. I have to feed them all massaged data to trick them. For example, my pension is

non-cola age 55-59
1/2 of CPI increase, 60-64
3/4 of CPI increase 65+

by the way, an increase of 1/2 of the CPI increase is NOT the same thing as half the pension being COLAd and 1/2 not (it's slightly less beneficial). If you put a series into a spreadsheet, you will see why.

I have the above sequence, and a similar one for my wife who is a different age than I am. It gets pretty complicated.

[Sam]

Originally Posted by SecondCor521

3. Use advanced Firecalc and trust it to do the right thing.

You sound skeptical. Did you find something wrong with the way SS is being handled by FIRECalc? I use this feature quite often and have no reason to doubt its accuracy.

[Alan]

I've never done anything other than advanced FIRECALC. When I get some time I'll try reducing expenses at the various points to see if it makes a significant difference. (I have just started taking a non-COLA pension this month, I have another that starts in 3 years and and a 3rd that starts in 10 years along with SS for self and wife.)

[SecondCor521]

Originally Posted by Sam

You sound skeptical. Did you find something wrong with the way SS is being handled by FIRECalc? I use this feature quite often and have no reason to doubt its accuracy.

No, but I have done software testing for a living for the past decade, and unless I know how it was developed and tested I am by nature skeptical.

Based on Dory36's posts and responses to bug reports with Firecalc, I think it's probably a pretty solid tool.

Do you have any reason to trust it's accuracy? Have you tested Firecalc to make sure it behaves the way you would expect with various inputs? I have not, but then I have not yet made the decision to retire. As the time gets closer I will probably scrutinize things better.

2Cor521

[Sam]

Originally Posted by SecondCor521

Do you have any reason to trust it's accuracy? Have you tested Firecalc to make sure it behaves the way you would expect with various inputs? I have not, but then I have not yet made the decision to retire. As the time gets closer I will probably scrutinize things better.

2Cor521

FC is definitely NOT bug free. It has several problems handling "abnormal" but valid inputs.

However, the SS portion is solid. I have used it many times and have no reason to distrust its ouputs.