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View Poll Results: Which Spending Model in Firecalc do you prefer/rely on most?
Constant Spending Power 56 74.67%
Bernicke's Reality Retirement Plan 5 6.67%
Percentage of Remaining Portfolio 8 10.67%
Manual Entry of Spending Changes 3 4.00%
None of the above - other 3 4.00%
Voters: 75. You may not vote on this poll

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Your 'go to' Spending Model in Firecalc?
Old 12-15-2018, 01:55 PM   #1
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Your 'go to' Spending Model in Firecalc?

Curious to know which Spending Model in Firecalc you used that gave you the most confidence in the resulting % success rate. I'm guessing y'all used them all but is there one you wanted to see a 95+ % success rate to give you the most confidence in your plans?

Personally, I rely most on the Manual Spending option.
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Old 12-15-2018, 02:06 PM   #2
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Constant. But I sanity check myself with the Bernacke model as I suspect that may be where we end up.
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Old 12-15-2018, 02:09 PM   #3
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I use Constant and % of remaining portfolio for 2 different scenarios. The Bernacke model appears very optimistic to me, but might be reasonable.
IIRC, the Manual Entry choice is only open to Firecalc supporters?
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Old 12-15-2018, 02:12 PM   #4
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Constant Spending Power... even though I think it might be conservative compared to what we might eventually do... I think that as we age we might be less active and therefore spend less, but that could be partially or even fully offset by higher health care costs.
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Old 12-15-2018, 02:14 PM   #5
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Quote:
Originally Posted by Dtail View Post
The Bernacke model appears very optimistic to me, but might be reasonable.
IIRC, the Manual Entry choice is only open to Firecalc supporters?
As much as I want to rely on it, I too thought the Bernicke model was overly optimistic.

Yes, the Manual Entry is only for FC supporters.
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Old 12-15-2018, 02:18 PM   #6
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I tried "Constant Spending". Liked what I saw.

Then, tried "Bernicke's Model". Liked that even more.

My spending hopefully will be somewhere in between.

So, I answered "Other".
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Old 12-15-2018, 02:22 PM   #7
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Constant. I sometimes check Bernicke's, but just to make myself feel good.
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Old 12-15-2018, 02:27 PM   #8
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Originally Posted by Carpediem View Post
As much as I want to rely on it, I too thought the Bernicke model was overly optimistic.

Yes, the Manual Entry is only for FC supporters.
As an example, if one wishes for 100% success using the Bernicke model, one can spend a maximum of WR 5.81%.
Not sure many folks on this site are willing to start spending 5.81% at age 58.
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Old 12-15-2018, 03:20 PM   #9
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Constant spending power but I manually drop my spending at 65 (Medicare - I budgeted for unsub ACA), 75 (go slow), and 85 (no go).
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Old 12-15-2018, 03:28 PM   #10
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Quote:
Originally Posted by pb4uski View Post
Constant Spending Power... even though I think it might be conservative compared to what we might eventually do... I think that as we age we might be less active and therefore spend less, but that could be partially or even fully offset by higher health care costs.
+1. Exactly.
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Old 12-15-2018, 06:54 PM   #11
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Constant Spending Power, because that most closely matches my past 12 years spending pattern. Honestly I haven't even looked at the others.

I target 95% historically safe, because I think the future will be slightly better than the past.

But then I have been under-spending that rate for my planning horizon (40 years). No real good reason now that I'm highly confident that my kids will be able to graduate from college debt free if they do reasonably well.

It looks like the constant spending / 95% safe / 40 years / 91% stocks / 0.05% ER rate is just about 5%. I'm at about 1.5%. A childhood friend died this week. I think I need to go blow some dough.
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Old 12-15-2018, 11:52 PM   #12
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I have mostly used Manual Spending. Lately since we have a new mortgage I have been backing out the mortgage payment for my annual spending and then showing it as a non-inflation adjusted spending.

We are now at a point where I think after next year I can use constant spending as I don't think there will be a lot of variation (at least not predicted variation). The past several years there has been a lot of variation and while kids were still in school especially we had higher expenses than we will have in future.
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Old 12-16-2018, 06:58 AM   #13
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Constant spending power - But, I suspect the Bernicke model does a better job of reflecting what most people will encounter. Although, I think the Bernicke model starts reducing spending too early. When I use it, I alter the age/dates to force later annual spending reductions.
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Old 12-16-2018, 07:21 AM   #14
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That’s very interesting that folks overwhelmingly favor the constant spending model in Firecalc, but very few here actually use it after retiring!
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Old 12-16-2018, 07:24 AM   #15
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Originally Posted by audreyh1 View Post
Thatís very interesting that folks overwhelmingly favor the constant spending model in Firecalc, but very few here actually use it after retiring!
In my view, the real value of FIRECalc is to show that you are relatively safe to retire. Then life happens.
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Old 12-16-2018, 07:59 AM   #16
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Constant spending model. Then I go to lump sum changes and fiddle around with possible unusual spending in a given year. Two years down the road, car. Five years, unexpected medical, then the vacation of a lifetime...a few months in Europe, first class.
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Old 12-16-2018, 09:13 AM   #17
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Quote:
Originally Posted by Carpediem View Post
Curious to know which Spending Model in Firecalc you used that gave you the most confidence in the resulting % success rate. I'm guessing y'all used them all but is there one you wanted to see a 95+ % success rate to give you the most confidence in your plans?

Personally, I rely most on the Manual Spending option.
As your post clearly says, there are two questions here.

1. What model do you use to test your RE plans in FireCalc?

2. What have you been doing since you actually FIRE'd?

I've been fully FIRE'd (no PT job, no working DW, no hobby business, no bluebird inheritance, etc.) for going on 13 years. (Not that there's anything wrong with any of those scenarios! They're just not what I'm doing.)

1. For original planning, I used a conservative forecast of my anticipated retirement budget + the constant spending model. There was enough in my forecasted budget to accrue for lump sum expenditures such as new cars, remodels, etc. I chose historical CPI.

2. For the first 12 complete years of FIRE, we've easily spent less than the original budget + inflation and were probably too conservative in our planning. I chose not to remove the dollars not spent from my FIRE portfolio and it's been a great time for portfolio growth, so things are looking fairly rosey in terms of current portfolio value.

Each year, our actual withdrawal amounts are calculated manually with our FireCalc budget as a guideline. That is, we use "constant spending" to test our future plans vs historical data in FireCalc, but that outcome is only one of several factors that influence what we actually do when the time comes in terms of spending.

We've learned that, by far, time is our most important and scarce resource. We make general plans within the broad financial guidelines of "FireCalc constant spending" and then modify them as we go along to maximize our enjoyment of our time generally within our broad spending constraints.

DW RE'd at 55 and I at 58. (Actually, I'm not retired, I'm "long term unemployed as I was unceremoniously canned by MegaCorp as I neared career end.) We're both 71 now. So far, we have definitely not seen any reduction in spending as we've aged. We do pretty much everything we'd like to do but there continues to be a list of activities we would gladly trigger if our budget were bigger.

In general, budgeting time is a LOT tougher than budgeting money. It seems so scarce and hard to control. Budgeting finances to support using time pleasantly is the target so we don't assume less spending power going forward.
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Old 12-16-2018, 09:23 AM   #18
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Originally Posted by audreyh1 View Post
Thatís very interesting that folks overwhelmingly favor the constant spending model in Firecalc, but very few here actually use it after retiring!
Not sure exactly what you mean by "interesting" in this case, but using the constant spending model to test and then modifying actual spending over time and circumstances is exactly what I would have expected.

There are two distinct questions:

What model do you feel gives you the most appropriate test of future spending plans?

As the reality of the present looms in, what do you actually do (with the constant spending testing as a general guideline)?
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Old 12-16-2018, 09:31 AM   #19
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A variation on this topic.

If one uses the Constant Spending yearly on Firecalc just for a continuing guideline that their plan is working, is it a viable metric once they reach 75 yo for example and put in 20 years left?

My question is the data used is less than 30 years and thus leaves out more market scenarios. For example the 1966 retiree's portfolio only became solvent by including years after 1982.....
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Old 12-16-2018, 09:32 AM   #20
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In my view, the real value of FIRECalc is to show that you are relatively safe to retire. Then life happens.
You betcha!
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