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Old 06-10-2008, 12:57 PM   #21
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They'll never sell another copy now!
As to the comments on annuities, I'm the one that originally asked about the product use for those who are retired, and guess what? I have an annuity !!!

Gee, since the product is as "intelligent" as me , maybe I'll purchase it!

- Ron
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Old 06-11-2008, 07:08 AM   #22
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Ron wrote:
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As to the comments on annuities, I'm the one that originally asked about the product use for those who are retired, and guess what? I have an annuity !!!

Gee, since the product is as "intelligent" as me , maybe I'll purchase it!
Maybe, maybe not. They advise people to buy real (inflation-indexed) life annuities, not nominal life annuities.

Robert K
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Old 06-11-2008, 08:10 AM   #23
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Ron wrote:Maybe, maybe not. They advise people to buy real (inflation-indexed) life annuities, not nominal life annuities.

Robert K
Unfortunately, I don't have a "normal life" (not to be discussed in an open forum).

In "my situation" it makes sense.

- Ron
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Old 06-11-2008, 10:06 AM   #24
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The Quicken software has worked mighty good for me - for many years now. I use the Home and Business version - and make adjustments periodically to align with the estate and retirement planning tools it has.
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Old 06-14-2008, 03:40 AM   #25
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I/DW are at a time in life that we have no financial obligations (house/cars/CC all paid off).

- Ron
Ron, you are to be commended for the above. IMO, that is WHY you can safely retire and maintain your lifestyle. Kudos.

I am 46 and have many work colleagues about the same age who in the past 2-3 years have refinanced their mortgages to new 30-year mortgages. I try to hold my tongue as it's not my business to save their butt, although if they ask me, I politely inform them that they'll still be paying on that mortgage when they are 75 years old and have had no job for about 10-15 years. Usually that comment goes in one ear, and you can guess where it comes out.

My thoughts on software in a separate post.

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Old 06-14-2008, 03:47 AM   #26
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I looked at a few software packages, and ultimately did not buy any of them. I work in corporate finance, but personal finance is a hobby of mine and I've even considered getting my CFP in the next few years.

I always find some deficiency with the software tools. Either they are too expensive, or don't include Monte Carlo, or too difficult to learn, or don't allow for multiple scenarios, or don't allow for work income while collecting SS, or assume investment returns are same pre-retire as post-retire, etc.

Another thing that concerns me is that I don't know whether to trust the tools' output. What I mean by this is that if you use many of the "free" tools on the web, and put in exactly the same info, you often get values that vary significantly. This makes me leery about the underlying assumptions used in the models (such as are the investments made in the beginning of the year or the end of the year or evenly throughout the year).

As a result, I simply do my own modeling in Microsoft Excel. Nothing I've built is flexible enough to allow the outside world to use, but it works well for my exact circumstances, and i KNOW what assumptions were used.

But, just for fun...I've included one of my favorite free online tools here..
Monte Carlo Retirement Planning
*Note that with the link above, the INITIAL tool is NOT the one I like...but they start you on this one to show the difference between a traditional tool and a Monte Carlo tool. You must click on the link at the bottom of the page to progress to the Monte Carlo tool...or I've made it easy for you by clicking here --> Monte Carlo Retirement Calculator

Enjoy!

Dave
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Old 06-14-2008, 05:24 AM   #27
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I've considered ESPlanner for a while but I'm too cheap to pay $199 for something so illusionary as a "fortune teller." There are just too many unknowns for the next half century. Maybe I'll change my mind after I read Spend till the End.

I've run my numbers through almost everything on the web and I think FIRECalc is the best or, at least, seems to consider the most obvious options. The basic premise of STTE is to not save too much or deprive yourself in retirement unnecessarily. Balancing these right gives the earliest "safe" date to FIRE. I believe I've reached the FI part and the extra income now is available for more travel and savings improves the travel funds available in retirement.

My "plan" is to have two spending streams. The first is a "decent" but basic ultra-safe spending plan that gives a good lifestyle but without much opportunity for travel or luxuries. The second is for more extensive travel and luxuries. This second income stream is calculated with a higher risk and allows for a shorter time frame. The logic being my desire and ability to travel will be much higher at age 60 than at age 90 but I'll still want a place to live and something to eat if I make it that long. Negative events will be absorbed out of the "luxury" fund.
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Old 06-14-2008, 07:06 AM   #28
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I've considered ESPlanner for a while but I'm too cheap to pay $199 for something so illusionary as a "fortune teller." There are just too many unknowns for the next half century. Maybe I'll change my mind after I read Spend till the End.
I would agree there is no perfect software because there are too many variables and too many uncertainties. However, ESPlanner Plus (with Monte Carlo which includes specific asset classes/allocation) provides the flexibility to vary returns, inflation, future Social Security, future Medicare and future income taxes over the period of your analysis. You have to decide how these elements will change (the $64,000 question IMO, to which no one can say with certainty), but you can enter whatever you are comfortable with - and then change it as much as you like to see the different results. No package is perfect, but I am having a good time quickly evaluating a lot of different scenarios. I am very good with Excel, but I could not build a spreadsheet that does everything ESPlanner Plus does. Obviously I don't care what anyone else does, but FWIW...
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Old 06-14-2008, 08:54 AM   #29
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Usually that comment goes in one ear, and you can guess where it comes out.
But there are new weapons for the arsenal. "Dont be like Jose Canseco and Ed McMahon!"
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Old 06-14-2008, 10:49 AM   #30
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The biggest issues which need to be addressed is a person's total faith in the software and their willingness to take the great leap into retirement. Many of us, almost but not quite me, are given no meaningful options and are sent forth from one form of employment with no comparable opportunities. There the decision is reduced to "how much can I spend?"

Then there are the ones suffering stress and burnout. "How soon can a leave and still survive?" becomes the driver.

For those of us making almost hedonistic piles of money and feeling no stress, the decision becomes less clear as to when to pull the cord. I don't personally want so large a portfolio that it really is more than I want to expand my lifestyle to. I want a simple life with a smaller place to live. I would like to have the ability to travel much more than I have been able to up until now. Right now I think I've reached the low end of this level. From this point on, I am simply building up my safety factor.

My current plan is to take advantage of the higher cash flow and spend it on some serious vacations. We recently returned from a Rhine Rive Cruise that raised my kids' eyebrows. Dad has been to cheap to do such things in the past so they are wondering what's up. I'm trying to get DW to plan another big trip for sometime in the next few months but my daughters have taken away my DW's commitment since they will be having a grandbaby marathon starting later this year. Between them and her father, she doesn't feel comfortable planning on being away until everyone's schedule is more fixed. This is a cop-out IMHO.

It still comes down to faith in your plan. The only pupose of any software is to give us a high level of confidence in that plan. There have been so many totally unexpected events that have shaped the last century that it's hard to really believe that we can use the data from the last century to accurately predict our future.
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Old 06-14-2008, 12:50 PM   #31
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I think you will find most here use spread sheets they have created and FIRECALC.
I use a spreadsheet I created for myself that goes out decades into the future. Putting it together and keeping it current forces me to think through the issues (e.g., required minimum distributions, among others) I will encounter. It also lets me run scenarios (e.g., 3% vs. 4% vs. 5% inflation rate, among others) to develop a feel for how I will fare in various economic climates.

I would like to get a monte carlo simulation of my situation using my detailed numbers, but I'm not willing to pay too much for the insight. Rather, I use conservative estimates (e.g., a 5% CAGR for my stock portfolio to simulate after-tax cashflows rather than a 7% or higher CAGR that is more lilkely).

If my finances hold up under the more conservative assumptions over the long term (which includes keeping an ample supply of cash and dividend-paying stocks in the mix to act as shock absorbers for a potentially down market), then I feel confident of being able to survive financially.
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Old 06-15-2008, 09:11 PM   #32
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I just finished reading Bengen's, "Conserving Client Portfolios During Retirement" which was recommended earlier in this thread. I found it very interesting but it's probably the most expensive book per word that I've ever read!
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