Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-07-2018, 12:24 PM   #181
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 4,569
Quote:
Originally Posted by Dtail View Post
Bolded - that's another thing with Fidelity's calculator. Even though it is stated that is run off 250 random calculations, the results are the same when run twice in a row with no changes in input.
In programming these things, it's often valuable to use the same set of random numbers with repeated runs so that the differences are due to changes in inputs rather than a change due to the specific set of numbers used. It's often very easy to get the same set of random numbers (technically psudo random) by specifying a starting seed, then the generator chains out the same set of values. Any statistical test would still certify the numbers are random, yet 100% predictable ... Tea and no tea at the same time!
__________________

sengsational is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-07-2018, 12:27 PM   #182
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 19,553
Quote:
Originally Posted by ERD50 View Post
If history says the belt only held up those pants 95% of the time, you sure might want to consider suspenders too!

Thanks for making my point!


-ERD50
Well, I didn't make your point, but if it makes you feel good then good for you.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is online now   Reply With Quote
Old 11-07-2018, 12:31 PM   #183
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 10,332
Quote:
Originally Posted by ERD50 View Post
Of course spending less will help any portfolio.
And, if you're denying yourself experiences you'd treasure by doing so, spending less is reducing the quality of your life.

But wait! That's seldom an issue on this forum since many (most?) of the members seem to hold the act of self-denial as the highest form of hedonist pleasure! That is, despite how much an experience might be savored and enjoyed, the act of denying that experience to yourself results in an even higher level of enjoyment.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 11-07-2018, 12:33 PM   #184
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: Tampa
Posts: 2,072
Quote:
Originally Posted by sengsational View Post
In programming these things, it's often valuable to use the same set of random numbers with repeated runs so that the differences are due to changes in inputs rather than a change due to the specific set of numbers used. It's often very easy to get the same set of random numbers (technically psudo random) by specifying a starting seed, then the generator chains out the same set of values. Any statistical test would still certify the numbers are random, yet 100% predictable ... Tea and no tea at the same time!
Interesting, plus I don't mind it the way it is set up anyway.
__________________
TGIM
Dtail is online now   Reply With Quote
Old 11-07-2018, 12:54 PM   #185
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,881
Quote:
Originally Posted by youbet View Post
And, if you're denying yourself experiences you'd treasure by doing so, spending less is reducing the quality of your life. ....
Absolutely, but that's a separate discussion, and a separate decision. And an important one for most of us.

Everyone has to decide for themselves on the balance between portfolio safety and when to retire and how much spending to allow. I guess sometimes it is pretty much decided for them (lay off, health issue, etc), and they need to adapt spending to those conditions.

But I just don't see how anyone can disagree that using the spending level for a 100% historically safe run is safer than the spending level from a 95% run. Spending less has to provide more safety against an unknown future. The difference may not be worth it to someone, but they can't (shouldn't?) deny it exists.


-ERD50
ERD50 is offline   Reply With Quote
Old 11-07-2018, 01:10 PM   #186
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 6,544
95% is not "as good" as 100%. Period. If you do face a historically bad sequence of returns, or underestimate your expenses, or have unexpected large expenses, having the extra of 100% will certainly be better than 95%. Both may break, but 100% will break less, and you won't have to do as much cutting of what you thought were essentials.

Or put it this way. I want a buffer. I guess that's the suspenders to go along with my belt. 100% is 95% with a buffer. I actually want 100% with a buffer, but I need less of one at 100% than 95%. Is 100% with a buffer bullet proof? Of course not, but it's more bullet proof (better) than 100%, which is better than 95%. I probably will never need that buffer nor the extra 5%, but I sleep better with it.
RunningBum is online now   Reply With Quote
Old 11-07-2018, 01:13 PM   #187
Recycles dryer sheets
 
Join Date: May 2013
Posts: 87
Quote:
Originally Posted by youbet View Post
And, if you're denying yourself experiences you'd treasure by doing so, spending less is reducing the quality of your life.

But wait! That's seldom an issue on this forum since many (most?) of the members seem to hold the act of self-denial as the highest form of hedonist pleasure! That is, despite how much an experience might be savored and enjoyed, the act of denying that experience to yourself results in an even higher level of enjoyment.
You assume there is an experience that would give me more enjoyment than sleeping soundly at night and minimizing worries about outliving my resources by living within a 100% success spend level. I've checked.

There is not.
footenote is offline   Reply With Quote
Old 11-07-2018, 01:17 PM   #188
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 6,544
Quote:
Originally Posted by youbet View Post
And, if you're denying yourself experiences you'd treasure by doing so, spending less is reducing the quality of your life.
Sleeping contently gives me a good quality of life as much as anything else.
RunningBum is online now   Reply With Quote
Old 11-07-2018, 01:42 PM   #189
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: Tampa
Posts: 2,072
Quote:
Originally Posted by RunningBum View Post
95% is not "as good" as 100%. Period. If you do face a historically bad sequence of returns, or underestimate your expenses, or have unexpected large expenses, having the extra of 100% will certainly be better than 95%. Both may break, but 100% will break less, and you won't have to do as much cutting of what you thought were essentials.

Or put it this way. I want a buffer. I guess that's the suspenders to go along with my belt. 100% is 95% with a buffer. I actually want 100% with a buffer, but I need less of one at 100% than 95%. Is 100% with a buffer bullet proof? Of course not, but it's more bullet proof (better) than 100%, which is better than 95%. I probably will never need that buffer nor the extra 5%, but I sleep better with it.
Well you can have 100% with a buffer in Firecalc. Just have the results be that the lowest $ left is equal to your portfolio balance vs. a $ amount lower than the port. balance but still is at 100%.
__________________
TGIM
Dtail is online now   Reply With Quote
Old 11-07-2018, 03:45 PM   #190
Recycles dryer sheets
T-Minus's Avatar
 
Join Date: Dec 2014
Location: Snowbird
Posts: 145
Quote:
Originally Posted by ERD50 View Post
I don't agree with this at all. Per FIRECalc:

A 40 year profile and a 1M portfolio, a 100% historical safe WR starts at $33,413.
...
That's a starting SWR of 3.34% for a 100% safe WR in FIREcalc. And yes, Big ERN's spreadsheet is in the ballpark. I just checked and that exact number is my upper spend limit. I expect things to loosen up a bit as pensions, SS and Medicare dates arrive...sort of like promotions (with raises) at ages 65 and 70!
T-Minus is offline   Reply With Quote
Old 11-07-2018, 05:42 PM   #191
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,930
Quote:
Originally Posted by youbet View Post
And, if you're denying yourself experiences you'd treasure by doing so, spending less is reducing the quality of your life.

But wait! That's seldom an issue on this forum since many (most?) of the members seem to hold the act of self-denial as the highest form of hedonist pleasure! That is, despite how much an experience might be savored and enjoyed, the act of denying that experience to yourself results in an even higher level of enjoyment.

I think it depends on the kind of experiences one treasures. We like experiences like hiking, visiting wineries and going to the theater on seat filler tickets so entertainment for us can be pretty inexpensive. We're looking forward to seeing the Mars probe land at the local space museum on the big screen theater this month and having family here for the holidays. I'm not really into trekking in Nepal even if it were free.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is online now   Reply With Quote
Old 11-10-2018, 11:02 AM   #192
Recycles dryer sheets
FinancialDave's Avatar
 
Join Date: Nov 2012
Location: Olympia
Posts: 124
Quote:
Originally Posted by footenote View Post
If you have used retirement calculators, what success percentage are you comfortable using / targeting?

Do you prefer historical (firecalc, ********) or Monte Carlo?

(Being ridiculously conservative, I always go for 100% success.)
I use only historical data, which will generally give results "wide enough to drive a truck thru," but I do want to know what the 100% success rate is because that is what you should shoot for.

Using Monte Carlo simulators is a waste of time, IMHO and that of Jim Otar, whose historical simulator I use. They are subject to too many results that would not likely ever occur in real life, mainly because you "disconnect" financial variables that are really correlated with one another, at least to some extent.
FinancialDave is offline   Reply With Quote
Old 11-11-2018, 06:01 AM   #193
Confused about dryer sheets
 
Join Date: Sep 2018
Posts: 3
Quote:
Originally Posted by GravitySucks View Post
So I'm trying to redefine Success (to me) in this area.

If my health remains good, I have a paid off house, and make it to 70 before starting SS, I think just having $300K of today's dollars at age 70 would still put me in a better situation than 80% of my fellow Americans. This could really increase what I could spend from 60 to 70.
Honestly how many cars will i buy after 70? 90% of the people I know over 80 don t want to travel much. Even just SS at that level covers all expenses and one of two cruises a year.
This success has a known end date as opposed to trying to look for my expiration tag.

If course that puts long term care pretty much into the hand of Medicaid. And even more a problem is what would I spend the extra on? Four months of travel and gifting some to DM and DDs this year and I'm still under last year's restricted spending.
Totally agree here. I believe once you get to your late 70ís spending really goes down. I donít see this talked about enough. The thought that there are 80 and 90 year olds burning through money having a good time does not compute.
Mhoepfin is offline   Reply With Quote
Old 11-11-2018, 08:43 AM   #194
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 19,863
Quote:
Originally Posted by Mhoepfin View Post
Totally agree here. I believe once you get to your late 70ís spending really goes down. I donít see this talked about enough. The thought that there are 80 and 90 year olds burning through money having a good time does not compute.
There are other things that burn through money in the 80s and 90s - long term care and medical expenses.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-11-2018, 09:12 AM   #195
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,881
Quote:
Originally Posted by audreyh1 View Post
Quote:
Originally Posted by Mhoepfin
Totally agree here. I believe once you get to your late 70ís spending really goes down. I donít see this talked about enough. The thought that there are 80 and 90 year olds burning through money having a good time does not compute.
There are other things that burn through money in the 80s and 90s - long term care and medical expenses.
+1. And by late 70's (or earlier), you may decide to pay for lots of things you used to DIY.

Spending on average probably goes down, but it isn't smart to assume averages apply to an individual.

-ERD50
ERD50 is offline   Reply With Quote
Old 11-11-2018, 09:38 AM   #196
Recycles dryer sheets
 
Join Date: Nov 2013
Posts: 396
This tread caused me to relook @ my numbers in terms of how much could we cut in a severe downturn. While we have substantial “discretionary” expenses that could easily be cut, the one thing I hadn’t factored was our inability to cut back on taxes which are a substantial number with uncontrollable income from taxable investments, social security and RMD past 70. Those will all generate substantial income tax expenses even if we are cutting back discretionary spending. I guess we need to get on the Roth conversion bandwagon.
jabbahop is online now   Reply With Quote
Old 11-11-2018, 09:54 AM   #197
Full time employment: Posting here.
USGrant1962's Avatar
 
Join Date: Dec 2016
Location: DC area
Posts: 687
Quote:
Originally Posted by jabbahop View Post
This tread caused me to relook @ my numbers in terms of how much could we cut in a severe downturn. While we have substantial ďdiscretionaryĒ expenses that could easily be cut, the one thing I hadnít factored was our inability to cut back on taxes which are a substantial number with uncontrollable income from taxable investments, social security and RMD past 70. Those will all generate substantial income tax expenses even if we are cutting back discretionary spending. I guess we need to get on the Roth conversion bandwagon.
Keep in mind that if you are talking about a market crash your RMDs will go down proportionately, your taxable investments are likely to be throwing off less, and you may be able to tax loss harvest. Add that to our progressive income tax system, which makes your taxes drop faster than income drops, and you may not need to worry too much about taxes.
__________________
Semi-ER March 24, 2017
USGrant1962
USGrant1962 is offline   Reply With Quote
Old 11-11-2018, 10:01 AM   #198
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 19,863
Quote:
Originally Posted by jabbahop View Post
This tread caused me to relook @ my numbers in terms of how much could we cut in a severe downturn. While we have substantial “discretionary” expenses that could easily be cut, the one thing I hadn’t factored was our inability to cut back on taxes which are a substantial number with uncontrollable income from taxable investments, social security and RMD past 70. Those will all generate substantial income tax expenses even if we are cutting back discretionary spending. I guess we need to get on the Roth conversion bandwagon.
It’s true that taxes on your SS income won’t necessarily drop BUT
In a severe market downturn, your RMDs will drop because your IRA has dropped, your taxable investments will throw off less income/cap gains, interest rates are lowered so interest income drops. Not only that but you have opportunities for tax loss harvesting that can offset remaining income even for several years.

So, in a bear market income does drop and taxes usually drop substantially.

From my past experience I know this to be true, and in my modeling based on past experience I see that the drop in taxes can go a long way to offset the drop in income such that after tax income isn’t hit nearly as hard as pre-tax income is.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-11-2018, 10:16 AM   #199
Full time employment: Posting here.
Sojourner's Avatar
 
Join Date: Jan 2012
Posts: 877
Quote:
Originally Posted by ERD50 View Post
Spending on average probably goes down, but it isn't smart to assume averages apply to an individual.
As all of us FIRECalc users know, there's an option for assuming reduced spending levels starting at age 56 and tapering off at 76. Apparently this is based on extensive research about spending habits as we age.

I've seen this first hand with my dad (in his early 80s now) and others of his generation. Much lower spending on just about everything, with healthcare being the obvious exception. My dad lives almost entirely on SS and will leave us an estate in the high six-figures, yet it would be like pulling teeth to get him to spend even $100 more per month on anything fun or "frivolous". He has zero interest in traveling or buying anything other than the basics. He seems very content, nonetheless.

Having said all that, I don't select the Bernicke's Reality Retirement Plan option in FIRECalc when calculating my SWR. I use the most conservative settings possible (e.g., no SS, no inheritance, living until 95+, etc.), regardless of how unlikely or unrealistic these assumptions are. That way, I feel like the S in SWR really means "safe", at least when it comes to my peace of mind.
Sojourner is online now   Reply With Quote
Old 11-11-2018, 11:03 AM   #200
Recycles dryer sheets
 
Join Date: May 2014
Posts: 341
Quote:
Originally Posted by USGrant1962 View Post
Keep in mind that if you are talking about a market crash your RMDs will go down proportionately, your taxable investments are likely to be throwing off less, and you may be able to tax loss harvest.
Not for everyone. My IRA is 80% fixed income, and that is mostly bond ladders. So RMDs would not be affected much by a market crash. And the market would have to decline by at least 60% for us to be able to TLH equities in our taxable accounts.

But I doubt that we would change our spending by much during a market crash anyway. Historically, our portfolio would have survived all 25-year sequences (our current life expectancy is < 25 years) with no change in spending, so why would I change it now? Well, psychologically I suppose there is some comfort.
__________________

TwoByFour is online now   Reply With Quote
Reply

Tags
calculator, success


Currently Active Users Viewing This Thread: 2 (0 members and 2 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Happiness leads to success vs Success leads to happiness Midpack Other topics 4 02-06-2012 08:59 AM
which company should i use for my 403b? can't use vanguard. check out my choices dooo42 FIRE and Money 8 12-04-2010 02:16 PM
Use Two Lines of Credit or Use One and Sell Mutual Funds retiringby50 FIRE and Money 13 02-02-2009 09:01 AM
What do you consider an acceptable success % testtubes FIRE and Money 75 02-12-2007 04:38 PM

» Quick Links

 
All times are GMT -6. The time now is 11:55 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.