Pralana Retirement Calculator

[cinman2000]

Anyone had experience with the Pralana Calculator? It's only $69 but I don't want to throw away my money....

[heeyy_joe]

No, but if you like it you will be paying for annual updates:

As a buyer of this product, can I get a price break on future updates? Our plan is to update PRC annually with revised tax tables and other enhancements, and to send discount coupons to all licensees for use in purchasing updates.

[cinman2000]

Quote:

Originally Posted by heeyy_joe No, but if you like it you will be paying for annual updates: As a buyer of this product, can I get a price break on future updates? Our plan is to update PRC annually with revised tax tables and other enhancements, and to send discount coupons to all licensees for use in purchasing updates.

Yes, I saw that. I think it is $10/year

[REWahoo]

Never heard of this calculator and reading all the marketing fluff on the web site leaves a bad taste in my mouth. A lot fizzy words with little substance.

Quote:

Performs Monte Carlo simulation to calculate the probability that our savings will outlast us despite annually varying rates of return? Yes Performs Monte Carlo simulation using my specific investment portfolio? No

No thanks.

[RonBoyd]

Quote:

Originally Posted by REWahoo A lot fizzy words with little substance. Performs Monte Carlo simulation to calculate the probability that our savings will outlast us despite annually varying rates of return? Yes Performs Monte Carlo simulation using my specific investment portfolio?

I agree. The same thing from Firecalc is free.

[cinman2000]

OK, maybe I should expand this thread. I found a list of calculators for sale here. Anyone have experience with any of these that make them better than FireCalc or Fidelity RIP?

[braumeister]

Several posters here have commented (mostly favorably) on these (and probably others that I've forgotten about):

AnalyzeNow!
ESPlanner
Financial Engines
Flexible Retirement Planner
Optimal Retirement Planner
T. Rowe Price Retirement Income Calculator

[pb4uski]

Quote:

Originally Posted by cinman2000 OK, maybe I should expand this thread. I found a list of calculators for sale here. Anyone have experience with any of these that make them better than FireCalc or Fidelity RIP?

Actually, my favorite is Quicken Lifetime Planner which is not on the list in the link and is included in Quicken Deluxe and higher. It is very easy to use and draws amounts from Quicken if you have your investment portfolio on Quicken. I have also used it to help some friends with retirement planning and just plugged in their tickers and shares.

While it isn't perfect, I think it is a good, simple, easy-to-use deterministic planner.

I supplement Lifetime Planner with Firecalc (and others), but I think for many people that lifetime Planner is more intuitive and easy to use than Firecalc. Lifetime Planner is also a good tool for people to think through the information that they need to do a reasonable retirement financial plan.

[Major Tom]

Quote:

Originally Posted by RonBoyd I agree. The same thing from Firecalc is free.

Or if you choose to make a donation, still very low cost and worth every penny.

Just thought I'd put a plug in there, as Firecalc is so useful, it's well worth making a donation to.

[RonBoyd]

Oh! I misspoke again. I meant that was the same thing that FireCalc promises. (as in the "little substance" comment.)

[REWahoo]

Quote:

Originally Posted by RonBoyd Oh! I misspoke again. I meant that was the same thing that FireCalc promises. (as in the "little substance" comment.)

[obgyn65]

No, sorry.

Quote:

Originally Posted by cinman2000 Anyone had experience with the Pralana calculator ?..

[ERD50]

Quote:

Originally Posted by RonBoyd I agree. The same thing from Firecalc is free.

FIRECALC is not Monte Carlo.

I'm not a fan of Monte Carlo for this use. Different asset classes have acted differently over time, and probably not randomly. So do the programmers try to add some correlation? Do they add enough, too much?


-ERD50

[REattempt]

At the risk of starting a slide in the thread, there are three major issues with MC simulators.

1) MC uses a distribution curve..most are uniform or normal distributions. This generates random numbers with equal frequency. Uniform distribution means that all returns will occur at an equal frequency, normal distribution will look like a bell curve. Problem: In reality, the distribution curve is significantly different. Market History shows that the distribution changes over time...typically it flattens over time...resulting in MC models not reflecting the entire retirement period accurately.

2) Outcomes are generated randomly in a single long rising trend (with variation along the trend. Problem: In reality, actual market history has long period secular trends (secular sideways, secular bull, secular bear) and Runaway Bulls.

3) Finally, unrealistic sequence of returns. Most MC simulators ignore extremes such as multiple year, back-to-back "streaks." Think of it this way...MC uses a bell curve and reality looks like a 4 humped bell curve around the four market trends noted above.

The results don't match reality.

Firecalc and Otar's calculators use historical returns and sequence of returns. While this doesn't have every POTENTIAL outcome, it is a better simulation of the likely outcomes than MC.

YMMV

[NanoSour]

Quote:

Originally Posted by cinman2000 Anyone had experience with the Pralana Calculator? It's only $69 but I don't want to throw away my money....

I just checked out the Pralana and I think you can get the same info with all the free calcs out there.

Having said that, I recently dropped some $$ for ESPlanner Plus and have absolutely no regrets and find it a very powerful tool in the decision process of whether to ER or not. You can start with the free online ESPlanner Basic to check it out.

I will say that FIRECalc and ORP results are in the ballpark as far as spendable money in ER, but ESP gives you the fine tuned details on a yearly basis with accurate SS and taxes (both Fed and State) figured in. ESP also takes into account portfolio asset classes in its MC simulation.

Feel free to PM me if you would like more info on ESP

[RetiringAt55]

Quote:

Originally Posted by pb4uski Actually, my favorite is Quicken Lifetime Planner which is not on the list in the link and is included in Quicken Deluxe and higher. It is very easy to use and draws amounts from Quicken if you have your investment portfolio on Quicken.

I really like Quicken Lifetime Planner in that it uses the actual numbers from your accounts so you can periodically check that you are still on track. I also like that you can check the numbers for each year during the calculations and see what is exactly happening to your accounts. For example, you can see that money is being transferred from tax deferred to taxable over time. You can see how much of the RMDs are excess.

A couple of complaints I have is that it does not seem to handle tax exempt correctly and I would like to see more flexibility with handling tax rates over time.

But with any planner the real question is the assumptions. Garbage in, garbage out. So much depends on your assumed rate of return, inflation, and estimated effective tax rate. The more conservative you can be the better.

[kyounge1956]

Quote:

Originally Posted by ERD50 FIRECALC is not Monte Carlo. I'm not a fan of Monte Carlo for this use. Different asset classes have acted differently over time, and probably not randomly. So do the programmers try to add some correlation? Do they add enough, too much? -ERD50

What about this option on the My Portfolio tab

Quote:

A portfolio with random performance, with a mean total portfolio return of (X)% and variability (standard deviation) of (Y) %. Assume an inflation rate of (Z) %.

Isn't this a form of Monte Carlo simulation? Or if not, how does it differ?

[REWahoo]

Yes, the 'random performance' option on the My Portfolio tab is a Monte Carlo simulation. Dory36 added it as an option to the historical look at portfolio performance.

I don't think I've ever used that option as the ability to test your portfolio against actual history is what differentiates FIRECalc from almost all other retirement calculators.

[kyounge1956]

Quote:

Originally Posted by REWahoo Yes, the 'random performance' option on the My Portfolio tab is a Monte Carlo simulation. Dory36 added it as an option to the historical look at portfolio performance. I don't think I've ever used that option as the ability to test your portfolio against actual history is what differentiates FIRECalc from almost all other retirement calculators.

Sure...being a fraidy cat I like to check both ways, historical and Monte Carlo, although for the Monte Carlo I usually use Flexible Retirement Planner. I guess that's my version of a "belt & suspenders" approach to portfolio testing. If it survives anything that has happened in history, and also thousands of random, non-historical simulations, I am pretty confident it will probably survive more or less anything that will happen in the actual future, except "the end of the world as we know it". My weaselly wording is deliberate--I can't really be certain of any such thing. But if I make 100% survival of both types of models my definition of portfolio success, at least I won't be putting myself in a situation which I know in advance is likely to fail.

[samclem]

Quote:

Originally Posted by REWahoo I don't think I've ever used that option as the ability to test your portfolio against actual history is what differentiates FIRECalc from almost all other retirement calculators.

Of course, most of the data is for the US, and post 1871. If we assume that countries go through cycles in their economic development, or at least take recognizable paths, it would be illuminating to see FIRECalc using a UK data set, a German data set, a Japanese data set, etc. Given the many changes in the US (politically, demographically, culturally) in even the last 40 years, it seems a stretch to expect our performance to be a recycle of even a jumbled version of the last 140 years (which have been spectacularly good for the US). It's certainly a valuable tool (I'm obviously relying on its output), but it would be interesting to plop in a set of numbers for another modern, developed country and see how things turn out. That Permanent Portfolio idea might shine a bit brighter for me!