What is ‘good enough’ when it comes to Planner success rates?

[Animorph]

I was happy with 85%, but I can tolerate a cut in my spending fairly easily also.

One thing I always think of is that I may not be so active after age 70 or so. I'm 59.5 now, so I've only got about 10.5 hopefully "good" years to do my active traveling and whatever. Delay just one more year at this point and there goes 10% of your best retirement years. You never know, it may turn out better or it may turn out worse. But those years become more valuable the older you get. It's a shame to waste them working if you don't have to.

 

[Senator]

Delay just one more year at this point and there goes 10% of your best retirement years.

How true. I always think of 70 year olds as being a bit old and not able to do much, and that's only 15 years away. In my head, I am still 30.

 

[48Fire]

Some of it comes down to having the "guts" to pull the trigger, then having them to remind yourself you made the right call. I was surprised when a coworker said he admired me for my guts.

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[LRDave]

I was happy with 85%, but I can tolerate a cut in my spending fairly easily also.

One thing I always think of is that I may not be so active after age 70 or so. I'm 59.5 now, so I've only got about 10.5 hopefully "good" years to do my active traveling and whatever. Delay just one more year at this point and there goes 10% of your best retirement years. You never know, it may turn out better or it may turn out worse. But those years become more valuable the older you get. It's a shame to waste them working if you don't have to.

Thank you for posting those words, Animorph. In the calculus of retirement planning, I think the non-linearity of the value of time will sway me out of the estate preservation stage.......

 

[REWahoo]

One thing I always think of is that I may not be so active after age 70 or so. I'm 59.5 now, so I've only got about 10.5 hopefully "good" years to do my active traveling and whatever. Delay just one more year at this point and there goes 10% of your best retirement years. You never know, it may turn out better or it may turn out worse. But those years become more valuable the older you get. It's a shame to waste them working if you don't have to.

+1

This is the critical equation missing from every retirement calculator.

When I retired at age 58 I believed the value of the next few years of retirement was far greater than the value of adding to my nest egg by continuing to work. Nine years into retirement I'm even more convinced of that belief. That was reinforced over the 4th of July weekend when my best friend growing up died of a heart attack at age 67. He was still working...

 

[Aus_E_Expat]

One thing I always think of is that I may not be so active after age 70 or so. I'm 59.5 now, so I've only got about 10.5 hopefully "good" years to do my active traveling and whatever. Delay just one more year at this point and there goes 10% of your best retirement years.

There is an interesting book on this by a New Zealand planner called "20 good summers". It basically looks at retiring at 50 - 55 as you may be lucky to have 20 years to have an active retirement, the remaining years will be less active.

Which brings me to my next point, none of the retirement calculators appear to factor in that for the first 10-20 years of retirement you will be more active and spend much more, in the later years you can still enjoy retirement but probably spend less.

My father is in his 90s now and basically spends nothing apart from on food and electricity.

For me, I do not want to spend the first 20 years of my retirement living frugally - I want to enjoy my time. Plus, I will still be supporting children so I think a budget of $150,000 per year is appropriate but when I get to 75, I would expect $50,000 (in today's money) will probably be adequate.

 

[user5027]

Which brings me to my next point, none of the retirement calculators appear to factor in that for the first 10-20 years of retirement you will be more active and spend much more, in the later years you can still enjoy retirement but probably spend less.

Check out Firecalc's "Other Income/Spending" tab and read under "Pensions, "Off Chart" Spending Changes, etc."

You can also use this section to enter "off chart" spending (or spending reductions).

 

[Jager]

A few months ago ha ha, in another thread, posted that retirement is, among other things "... a leap of faith." That simple phrase instantly struck me with its wisdom. It encapsulated for me - for a lot of us, I think - the uncertain nature of this FIRE business.

We try and bring certainty to the question of when we're good-to-go, but are forever denied. We're denied because it's more a question of philosophy, of trying to pin down the vicissitudes of life, than about numbers.

It's probably even worse for us, the cohort mostly seen on this board, because we're detail-oriented, we're especially wired for crunching the numbers, for tracking expenses, and for LBYM. The very things that got us to the finish line are the things that impede our finally stepping across it.

Ergo the never-ending OMY stories.

My advice to the OP... just do it.

 

[rodi]

I just retired 3 weeks ago. And I find myself terrified at times, and thrilled at other times.

I'd run every calculator, every possible way. But unlike some others here, I used 100% of SS and pension, and 70% of rental income. My spending amount was based on the last several years gross income, less mortgage, retirement savings, medicare and SS tax, and then added in healthcare increases. I planned for continued college fund savings for my two minor children - since I still have that big bill ahead of me. Since I'd led a very comfortable lifestyle prior to retiring, I planned for the same lifestyle. I paid off my house the same week I retired.

I also set aside $100k for "other stuff" - didn't include it in my nest egg figure. That's earmarked for the new driveway (mid process right now), new master bath, new car in a few years, a big trip next year, and "extra" emergency fund. (Already had 6 months of spending set aside in an off books emergency fund.)

I think it's easier for folks with COLA pensions that cover a large percentage of their spending. I look at rental income as COLA adjusted.

3 weeks in - I still run the calculators. I hope with time I'll get less nervous.

For me, I'd gotten 100% from calculators for close to a year but was nervous to pull the plug. I was firmly in OMY mode. The thing that tipped me over the edge was learning that I'd likely have to travel for 1 week work trips, every 3-4 weeks for the summer and fall.... I didn't want to impact my non-work life with this travel. Then I had some awful commutes home due to freeway construction - construction that will be continuing for another 2 years.... I came home and ran it by my husband, and gave notice the following Monday.

 

[daylatedollarshort]

I came home and ran it by my husband, and gave notice the following Monday.

Good for you. I hope ER is everything you had hoped it would be.

 

[MRG]

I just retired 3 weeks ago. And I find myself terrified at times, and thrilled at other times.

I called that normal. It got better for me with each month, took probably a year for me to not be terrified. YMMV. Congratulations on retiring.

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[Midpack]

"Good enough" is whatever results give you the confidence to retire. That number is different for almost every individual - what works for me probably won't work for you and vice versa.

OMY can be a good thing - or it can be a sad loss of opportunity. Only you can make the call.

+1. I needed more than a 100% success rate to have the "confidence to retire." But there is no right answer, each of us has to make the call for ourselves. And some have contingency plans, going back to work or some other income source, while others have to rely on their nest egg alone.

 

[W2R]

A few months ago ha ha, in another thread, posted that retirement is, among other things "... a leap of faith." That simple phrase instantly struck me with its wisdom. It encapsulated for me - for a lot of us, I think - the uncertain nature of this FIRE business.

Retirement day felt to me like skydiving (= "jumping out of a perfectly good airplane") must feel. Exhilarating and terrifying at the same time.

I just retired 3 weeks ago. And I find myself terrified at times, and thrilled at other times.

Exactly! But as MRG pointed out, it gets less terrifying for many of us with the passage of time, as you begin to absorb the fact that the money really IS there each month as planned. At least for me, it was just the uncertainty of it all that scared me so much. Well, that plus knowing that I probably would never find a job like the one I had again at my age.

 

[SJ1_]

So, when you did your retirement budgeting and planning exercises, what success rate in the planners did you feel was good enough?
for me 100%
And did you discount any income streams or add to any expenses ‘just in case’? In a way. We have a huge travel budget and if we have large medical expenses it comes from that.

Did you ever wish you would have worked longer as you did not have enough income in retirement? no - I actually wish I left a little earlier. I have
met a number of people who have said the exact same thing and so far it is about 10 to 0 on the wishing one left earlier vs wishing I stayed there longer.
It is really hard to grasp how good retirement is.
(Not those of you who go back for fun). Or actually had to pick up a minimal wage job because you needed the money?
Not yet. We just got back from a week in Glacier National park and thought
about spending a summer working there but so far I have not got past the
"thinking about it".

 

[grasshopper]

We retired at 54/50 in 2006 Quicken Lifetime planner guessed 90% chance of success. Than 2007-2008 and we lost plenty, today QLP says I will kick the bucket with more than I have now. By the way 7/2016 I will be cruising the Galapagos and than on to Machu Picchu.

 

[Senator]

Thank you for all the responses.

7/2016 I will be cruising the Galapagos and than on to Machu Picchu.

Awesome!!

it is about 10 to 0 on the wishing one left earlier vs wishing I stayed there longer.

The more I look at things, the more I see that same attitude. I talk to other 'live' people here too.

Retirement day felt to me like skydiving

Awesome quote. I can see it will be the same for me.

I hope with time I'll get less nervous.

That's where I am at too.

 

[WannabeRetired]

At least for me, it was just the uncertainty of it all that scared me so much. Well, that plus knowing that I probably would never find a job like the one I had again at my age.

This is what makes me really nervous. My spouse could easily find a good job again if needed I think, but it probably would be minimum wage city for me if we ended up retiring too early and needed to work later.

 

[W2R]

This is what makes me really nervous. My spouse could easily find a good job again if needed I think, but it probably would be minimum wage city for me if we ended up retiring too early and needed to work later.

That's where I'm at, too. There are so few high paying jobs in my field, and so many bright young scientists eager for them. I doubt I could even get a minimum wage job without lying, due to being overqualified.

But, I am very certain after five years of retirement that I will never have to work again. I have income streams from a number of different sources, and so by now I am actually as confident (or more confident?) of my income now than I was when I was working.

 

[WannabeRetired]

But, I am very certain after five years of retirement that I will never have to work again. I have income streams from a number of different sources, and so by now I am actually as confident (or more confident?) of my income now than I was when I was working.

That's gotta be a wonderful feeling. I noticed your other thread on the additional Social Security benefit you were able to get. Very cool. Congrats!

 

[nuke_diver]

Senator

I'm the same as you as well. Constantly reading the reports about how/how not to retire, running various scenarios to see if the money will last till I'm 100, 110 120 (pretty sure I don't want to be this old unless I'm a cyborg). Most except for low return/high variability MC simulations show we are good. But it's tough to transition to no paycheck and paying for everything (like HC) when you haven't done it before. My logical side says if there is a worse case scenario like 1929 again we are still going to be better off than 90% of the people who aren't as frugal/savers as we are...but it doesn't make it less anxious.

That said I am probably going to work about 1 more year I think since we have some renovations this year and I need to get my knee scoped and I might as well do those things while I have an income stream. Then we will see. As may have said there is a point where we all need to decide if working is worth it (it isn't for me) and if we want to have some time where we can enjoy our retirement while we are young enough and healthy enough to do so.

Best case scenario for me...work for 1 year or so and get laid off with an ok package (my company never does good ones) which would help cover another 6 months to a year...but they seem to like me too much here in spite of my attempts to be as difficult as possible

 

[Cat-tirement]

Which brings me to my next point, none of the retirement calculators appear to factor in that for the first 10-20 years of retirement you will be more active and spend much more, in the later years you can still enjoy retirement but probably spend less.

i-orp.com has a "Reality Retirement Planning" option that uses the higher spending early, less spending later approach described by Ty Bernicke.

 

[tuixiu]

We finally settled on:

Minimum 95% success rate in firecalc
Enough slack in our spending plans so we could turtle up if needed
70% of what gov says we'll get for social security
6 figure vacation fund (outside of retirement savings) that could also be used to smooth out early bad market years

We're quitting at the end of this year ages 46/43, I'm both excited and terrified.

 

[rodi]

i-orp.com has a "Reality Retirement Planning" option that uses the higher spending early, less spending later approach described by Ty Bernicke.

firecalc also has a bernicke option as an alternative to flat spending.

 

[Senator]

Minimum 95% success rate in firecalc

Firecalc is one where you have to figure out your tax expenditures yourself. Do not forget about tax expenses.

i-orp.com has a "Reality Retirement Planning" option that uses the higher spending early, less spending later approach described by Ty Bernicke.

Most planners you can introduce an extra expense, like $20K for the few 15 years for travel or anything else. Even FireCalc.


All great responses. As I get closer, I am saving and monitoring my budget. I only spend ~20% of what I make, so I can sock away quite a bit. Once I get another year from here, I will probably have a lot more confidence.

It is just incredibly different and exciting to think about. Something I have been planning on for ~40 years...

 

[2B]

I've been a chronic OMY-er and I must admit that my risk aversion is part of the problem.

If I say my "basic buy pleasant" expenses with taxes and health care is a 1, FireCalc gives me a steady SWR of approximately a 2 and a 2.6 initial withrawal for Bernicke. ORP gives me a 2.4 for steady and a 3.1 initial withdrawl using "Reality." Using the Merriman variable approach, I could take a variable initial withdrawl of 2.6.

Excess is available for extras like fancy vacations, gifts, paying for grandkids college, etc. The basic expenses covers an occasion week by a lake. If things ever got tight financially, we could cut our expenses almost in half.