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The most detailed FIRE software?
Old 01-05-2015, 01:53 PM   #1
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The most detailed FIRE software?

I posted a while back that I was looking at taking severance at big oil to retire early. I have a FP guy who has run 10 year cash flows, asset values, taxes, etc. I want to check his numbers. I could I guess go find another FP but can I do my own analysis? Can I generate my own yearly cash flows, asset values, etc.? I've used various on-line calculators: ORP, Fidelity, Flexible Planner, Firecalc, cFIRE and also tried Pralana's free version. I don't think any of these cover all the necessary tax calcs, SS calcs, etc etc. I used these just to see how close I could come to retiring.

So is there a very detailed software out there that I can buy that you guys feel confident in? I really want a "second opinion" on my FP's numbers.

I don't have any real unusual financial stuff to model. Just a lump sum pension, severance, SS at some point, college expenses.

Gotta run, but will check back later. Thanks
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Old 01-05-2015, 02:00 PM   #2
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The Fidelity RIP has a year by year cash flow detail with asset balance with estimated taxes as an option on the analysis screen. The only way I know to get our taxes closer is to use Turbotax. But that is kind of pointless as tax laws and rates change regularly anyway, so for I've found the RIP to be as good as any for estimating taxes 10+ years out.
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Old 01-05-2015, 02:01 PM   #3
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I don't think any of these cover all the necessary tax calcs, SS calcs, etc etc.
Fidelity RIP covers all of those.
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Old 01-05-2015, 02:11 PM   #4
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I used Fidelity RIP it seemed to be the most conservative. I had all the screws dialed back 95%.....

One suggestion is to itemize your expenses. I believe RIP has a higher rate of inflation on healthcare, causing a more conservative estimate.

Agree with prior posts it would seem RIP will handle all you described you needed.

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Old 01-05-2015, 03:31 PM   #5
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I used Fidelity RIP it seemed to be the most conservative. I had all the screws dialed back 95%.....

One suggestion is to itemize your expenses. I believe RIP has a higher rate of inflation on healthcare, causing a more conservative estimate.

Agree with prior posts it would seem RIP will handle all you described you needed.
I do think the healthcare is overestimated on RIP. I put healthcare under regular expenses and leave pad in the budget for healthcare to be higher than planned or other unexpected expenses to crop up.

Otherwise I like RIP. I have my own spreadsheet and and the RIP numbers seem to jive pretty well. Taxes on RMDs are potentially our one of our biggest expenses categories in retirement so any planner without taxes and RMDs is of very limited use to me.
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Old 01-05-2015, 03:38 PM   #6
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Concur regarding RIP addressing your needs. ESPlanner also provides detailed analysis of a myriad of calculations, including SS, state/federal, among many others. It's the most detailed I've found. I use and like it.
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Old 01-05-2015, 04:09 PM   #7
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What I want is a FIRE software that tells me what the S&P return and inflation are going to be for the next 20 years. I do not need 30 years as I will not live that long, but that would be nice so I can make plan benefiting my offsprings. Another plus would be future return of foreign indices, or a break down of the US market return by large vs. small caps, growth vs. value, etc...

PS. I try to optimize my financial situation according to the equations below in my signature line. I can control my expenses or WR to some extent, but how about the other 3 variables, namely capital gain, dividend, and inflation? Too many unknowns!

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Old 01-05-2015, 05:43 PM   #8
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What I want is a FIRE software that tells me what the S&P return and inflation are going to be for the next 20 years.

I can't tell you how to do exactly that but I will tell you what I do.

I book marked the WSJ. Then I go to the preferences window and set the computer date to sometime in the future, say January 5, 2018. I then click on the WSJ bookmark and presto!!! S&P results and other financial information to guide my next three years of investing.

Warning: this technique will get you banned by the Las Vegas bookies.


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Old 01-05-2015, 06:07 PM   #9
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Originally Posted by daylatedollarshort View Post
I do think the healthcare is overestimated on RIP. I put healthcare under regular expenses and leave pad in the budget for healthcare to be higher than planned or other unexpected expenses to crop up.

Otherwise I like RIP. I have my own spreadsheet and and the RIP numbers seem to jive pretty well. Taxes on RMDs are potentially our one of our biggest expenses categories in retirement so any planner without taxes and RMDs is of very limited use to me.
The healthcare is why I don't like RIP. I don't know what they are using but it seems way out of line. If I put a value into the HC portion of RIP it ends up roughly doubling the required withdrawls (so on something like 100K at the start ends up being well over 1M at the end verses 400K) out 30-40 years. I don't think that is realistic. I don't think RIP does taxes either (least not that I saw). My fav is Flexible Retirement Planner because...well it's very flexible and I can pretty much customize it however I want (want crazy market swings and adjusting your WDR accordingly is doable). The output was abit harder to understand that ones like FireCalc or RIP but once you understand it's great. Taxes however would need to be handled in the additional input and would be your best guess
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Old 01-05-2015, 06:26 PM   #10
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Originally Posted by Chuckanut View Post
I can't tell you how to do exactly that but I will tell you what I do.

I book marked the WSJ. Then I go to the preferences window and set the computer date to sometime in the future, say January 5, 2018. I then click on the WSJ bookmark and presto!!! S&P results and other financial information to guide my next three years of investing.

Warning: this technique will get you banned by the Las Vegas bookies.

OK, I tried changing the date of my computer clock, but then Quicken said "Sorry, your version expired, so online services are unavailable." How am I going to know what is going to happen to my stash? How do you get Quicken version 2018?


Enough goofing around... Seriously, I personally do not do detailed planning, but do look at past expenses as a basis for projection into the future. I do not miss any expenses that way.

And even if my expenses come out exactly as planned, and they have not, the variations are swamped by market vagaries anyway. All I can do is to try to have a lot of margins for safety.
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Old 01-05-2015, 06:43 PM   #11
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The healthcare is why I don't like RIP. I don't know what they are using but it seems way out of line. If I put a value into the HC portion of RIP it ends up roughly doubling the required withdrawls (so on something like 100K at the start ends up being well over 1M at the end verses 400K) out 30-40 years. I don't think that is realistic. I don't think RIP does taxes either (least not that I saw). My fav is Flexible Retirement Planner because...well it's very flexible and I can pretty much customize it however I want (want crazy market swings and adjusting your WDR accordingly is doable). The output was abit harder to understand that ones like FireCalc or RIP but once you understand it's great. Taxes however would need to be handled in the additional input and would be your best guess
For RIP I just put healthcare as a miscellaneous or custom expense. RIP does do taxes. They are listed year by year on the detailed cash flow summary.
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Old 01-05-2015, 08:09 PM   #12
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thanks everyone.
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Old 01-05-2015, 10:34 PM   #13
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Originally Posted by NW-Bound View Post
What I want is a FIRE software that tells me what the S&P return and inflation are going to be for the next 20 years. I do not need 30 years as I will not live that long, but that would be nice so I can make plan benefiting my offsprings. Another plus would be future return of foreign indices, or a break down of the US market return by large vs. small caps, growth vs. value, etc...

PS. I try to optimize my financial situation according to the equations below in my signature line. I can control my expenses or WR to some extent, but how about the other 3 variables, namely capital gain, dividend, and inflation? Too many unknowns!

VVVVVVVVVVVV
In Monte Carlo mode, ESPlanner uses DFA funds covering the types of funds you mention above, including international. You can customize instead and input your own funds, but I skipped this as my VG funds have outperformed DFA funds. Yes, this isn't as precise, but good enough for my purposes.

ESP allows you to input estimates for inflation, but I know of no calculator that covers capital gains and dividends (others may). One of the best ways to cover unknowns is to allow for a certain amount of padding and reduce discretionary spending during downturns. In this respect, I like CFIREsim as it's variable spending mode really shows the impact reduced spending can have on PF success.

Personally, I'm up to using 6 calculators now (ORP, RIP, FIRECALC, CFIREsim, Financial Engines, ESPlanner),and am satisfied with what they collectively tell me. FIRE is as much of a leap of faith as anything else, although a very calculated and researched leap, hopefully. As they say, the enemy of a good plan is the search for a perfect plan.
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Old 01-05-2015, 10:46 PM   #14
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We have a pretty conservative AA, SS and pensions and just plan on 1% real, so it is fairly easy to do that in a spreadsheet. I compare that to either the most conservative option in the RIP or let it default to our current AA in with Fidelity, and the results between the two AAs in the RIP and my spreadsheets are all pretty comparable. We're invested mainly just for capital preservation these days so our plan is not complex nor highly variable.
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Old 01-05-2015, 10:56 PM   #15
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In Monte Carlo mode, ESPlanner uses DFA funds covering the types of funds you mention above, including international. You can customize instead and input your own funds, but I skipped this as my VG funds have outperformed DFA funds. Yes, this isn't as precise, but good enough for my purposes.

ESP allows you to input estimates for inflation, but I know of no calculator that covers capital gains and dividends (others may). One of the best ways to cover unknowns is to allow for a certain amount of padding and reduce discretionary spending during downturns. In this respect, I like CFIREsim as it's variable spending mode really shows the impact reduced spending can have on PF success.

Personally, I'm up to using 6 calculators now (ORP, RIP, FIRECALC, CFIREsim, Financial Engines, ESPlanner),and am satisfied with what they collectively tell me. FIRE is as much of a leap of faith as anything else, although a very calculated and researched leap, hopefully. As they say, the enemy of a good plan is the search for a perfect plan.
Oh, I forgot to add the following feature among my wish list for a perfect FIRE software: the exact date of my expiration. That would allow me to perfectly optimize my spending to maximize pleasure for the rest of my days.
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Old 01-06-2015, 12:11 AM   #16
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I found this software useful (free online)

Retirement Planning Tool - Visual Calculator

What I liked about it, was you can change the assumptions for inflation and expenses in the advanced settings if you want to see effects other than the default values.
It allows you to include SS or not, but unless I am using it wrong, you have to play with the income level to get the "right" SS number (if your income was like mine), then freeze the SS value, and reset the earnings number to the correct number.

If your income was pretty consistent, then you won't have this issue.
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Old 01-06-2015, 10:45 AM   #17
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For RIP I just put healthcare as a miscellaneous or custom expense. RIP does do taxes. They are listed year by year on the detailed cash flow summary.
I do the same just because the numbers otherwise were crazy (I would need something like 6M to retire O_o). I do use RIP it just isn't my favourite because it clearly does some stuff I can't control. And in FRP I can do things like simulate hyper-inflation or crazy market swings. In fact I use them all. Only RIP says I need more and only when I put HC in HC

Thanks for the info on the taxes I didn't notice...I check them against my spreadsheet (yeah I have a spreadsheet for RP as well ...trying to cover all the bases )
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Old 01-06-2015, 11:07 AM   #18
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The most detailed FIRE software I've used consists of Excel and the gray matter between my ears.

I've used all the online tools, but mainly as a check against my own models. Fidelity's RIP is one of the better examples, but it's still a "black box." I can only see the results. I'm left guessing as to the reasonableness of underlying calculations and assumptions. But if you're in a hurry, that's probably the best option.

Most of the online tools are not comprehensive or flexible enough for my needs. They each seem to have a unique "angle" that is quite good, and then the rest is glossed-over as unimportant. My approach has been to learn from each of their strengths, steal shamelessly, learn from others on this forum with direct experience, and incorporate all this into my own model that is customized to my specific situation, and detailed enough that I can be confident using the output for decision-making.

IMHO, there are no shortcuts. If you truly want to be confident in your decision to ER, you need a detailed understanding of the numbers, especially the assumptions and the sensitivity of the results to each assumption. ER is a big decision. So are all the associated decisions right before and after ER. Personally, I would never "outsource" the analysis on something that important.
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Old 01-06-2015, 11:41 AM   #19
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I use Fidelity RIP and Firecalc. The medical expenses in RIP are set at 7% per year while other expenses are at the default 2.5% per year. I do like the projected tax feature, especially during RMD's.


I also create Excel spreadsheets to predict expenses/spending for the next 5 years. The biggest variable and risk I see is Sequence of Return risk. Unfortunately, there is no way to predict what your ROI will be.
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Old 01-06-2015, 12:11 PM   #20
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Does ESPlanner not give you a consolidated cash flow report? I see a spending report, an income report, an asset report, but I dont see one consolidated report with all those one it by year. Am I missing it? That would be a nightmare to work with.
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