Vanguard Investment Plan v. FIRECalc Results
Hi. I have a follow up appointment with a Vanguard CFP tomorrow to discuss the investment plan that they prepared for me. I am concerned about the results when I compare their numbers to the numbers I have generated through FIRECalc.
There are a couple of variables where I understand why the Vanguard results may not show success as high as the results I obtain with FIRECalc. For example, Vanguard used 100 years as my life expectancy whereas I have thus far used 88 years in FIRECalc. And Vanguard used a 50% stock 50% bond allocation whereas I have run FIRECalc simulations with a 60% stock 40% bond allocation.
The Vanguard result says that I have a 57% likelihood of success if I implement my retirement as it stands today. FIRECalc says that I have a 65% likelihood of success. Not vastly different.
But Vanguard has my total annual retirement expenses much higher than I have been using. Vanguard is estimating that my federal and state tax liability will be about 17.5% in addition to my annual retirement expenses. Based on my own TaxCaster runs, I was approximating my retirement federal and state tax liability at approximately 5.5%.
Vanguard shows my fixed rate mortgage payments increasing slightly on an annual basis. Why would a fixed rate mortgage payment increase with time?
FIRECalc suggests that my current investment portfolio could support an annual retirement spending of $45,164 with 95% likehood of success. Vanguard suggests that my investment portfolio could only support $42,700 in annual retirement spending with 57% likelihood of success. I don't understand the drastic difference.
Is there someone willing to take a look at the Vanguard plan to give me some insight as to why the Vanguard plan is not as encouraging for my retirement goal as is the results I get with FIRECalc? If so, send me a private message, so I can show you the Vanguard plan. Thanks.