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Error using "leave some money in the portfolio"
Old 12-10-2010, 07:33 PM   #1
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Error using "leave some money in the portfolio"

I have 100% success, with minimum $475,000. Then when I say to leave at least $400,000 at all times, there are failures.
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Old 12-10-2010, 09:52 PM   #2
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You're going to have to give more details if you expect someone to duplicate this. The simplest set of inputs that creates the problem would be the best.

I used $1M for a 30 year portfolio and said keep $475K and I had to take spending down to 20K for 100%. When I lowered the 'keep it' number to $400K, I still got 100%.

Check your input data.

-ERD50
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Old 12-10-2010, 10:03 PM   #3
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I wouldn't be so sure that's a FIRECalc error.

In general, a larger ER portfolio can handle more volatile swings than a smaller one. By specifying an extra $75K crash pad, you're avoiding the disasters that you see without it.

Another non-intuitive example is the "pay off the mortgage" problem. For one run you could start ER on a $1.2M portfolio and add the P&I payments on a 30-year $200K mortgage to your other expenses. Then you could do another run with an $1M portfolio and your expenses without the mortgage. At some combination of portfolio & mortgage amounts, having a mortgage leads to a higher success ratio... due to the bigger portfolio being able to absorb larger volatility variations without failing.

We've never mapped out the "efficient frontier" sheaf of combinations of curves of portfolio size & mortgage amount, but you could try it for your personal numbers.
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Old 12-10-2010, 11:41 PM   #4
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If you want to post a particular FireCalc scenario, you can post a url that contains precisely all the parameters you entered.

If your browser is IE, on the results page, right click on "Link To This Set Of Data", then click on "Copy Shortcut", the paste it into a post.

If your browser is Chrome, on the results page, right click on "Link To This Set Of Data", then click on "Copy Link Address", then paste it into a post.

If you are using a different browser, do whatever works for that browser.

Here is what the default FireCalc results url looks like:

FIRECalc: A different kind of retirement calculator

Yeah, I know it is a mess (that you can't necessarily see in a post because of how the software handles it), but it contains exactly every parameter entered.
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Old 12-11-2010, 10:19 AM   #5
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Don't recall all parameters; I think I started w/ 1.2M. It was a nice tight bundle of lines too.

>In general, a larger ER portfolio can handle more volatile swings than a smaller one. By specifying an extra $75K crash pad, you're avoiding the disasters that you see without it.
>

It did not fail by going to zero dollars and then coming back up (it tells you in red when that happens). It failed by going under $400K.

How can it go under $400k when it DID NOT go under $475k with all other parameters the same ?
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Old 12-11-2010, 12:13 PM   #6
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Quote:
Originally Posted by Bongleur View Post
Don't recall all parameters; I think I started w/ 1.2M. It was a nice tight bundle of lines too.
How can it go under $400k when it DID NOT go under $475k with all other parameters the same ?
It'd be great to be able to reproduce your results by duplicating your data entry and then analyzing the software's behavior...

Otherwise we're all just sitting around wasting watching you shoot down our conjectures.
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