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Explain use of "off chart" spending
Old 03-14-2019, 08:28 AM   #1
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Explain use of "off chart" spending

The verbiage is completely incomprehensible to me. I don't understand the distinction between Pension vs Off chart. If it is additional income, its a positive number, starting in the year entered. If it is additional spending, a negative number. Don't understand any difference between "portfolio withdrawal" and "ordinary lifestyle." "will not be shown in the annual spending chart that will be shown in the results." -- What spending chart?
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Old 03-14-2019, 08:29 AM   #2
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And why doesn't this software recognize my use of the RETURN key to leave a blank space between paragraphs? Its CR-LF.
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Old 03-14-2019, 08:30 AM   #3
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And I never turned on use of emoji symbols.
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There is also a How It Works help file
Old 03-14-2019, 09:09 AM   #4
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There is also a How It Works help file

There are seven tabs near the top of the display. "Spending Models" is the fourth tab, right between "Not Retired" and "Your Portfolio".

The default expectation in FIRECalc is that you'll spend the same amount, adjusted for inflation, every year during your retirement. The "spending chart" only appears if you choose a spending model other than the constant spend assumption.
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Old 03-14-2019, 09:41 AM   #5
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Originally Posted by Bongleur View Post
The verbiage is completely incomprehensible to me. I don't understand the distinction between Pension vs Off chart. If it is additional income, its a positive number, starting in the year entered. If it is additional spending, a negative number. Don't understand any difference between "portfolio withdrawal" and "ordinary lifestyle." "will not be shown in the annual spending chart that will be shown in the results." -- What spending chart?
It's a way to fine tune FIREcalc if you know your spending is going to significantly and permanently change in the future.

For example, let's say that I spend $40,000 per year today. Included in that $40,000 is $1,000 a month in child support for my 8 year old, and that child support ends when the child turns 18.

If I put in $40,000 a year as spending, then FIREcalc will overestimate how much I need to have, because it assumes I need to spend that amount for the rest of my life.

But I probably shouldn't ignore the $120,000 in pending child support payments over the next 10 years either.

So I put in $40,000 a year as spending, and then enter an "off chart spending reduction" of $12,000 per year starting 10 years from now. Since child support doesn't change with inflation, I uncheck the inflation box.

Now FIREcalc can do the runs with 10 years of $40K and the rest of the time period (30 years or whatever I choose on the first tab) at $28,000.

...

Basically any time you will have a significant and immediate increase or decrease in spending that you're willing to count on, you can use this feature.

Other examples might include paying off your mortgage, or the start of a pension, or the decision to start skydiving at age 80, or whatever.
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Old 03-14-2019, 10:37 AM   #6
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But the bottom line is that MORE spending should be entered as a negative number, and LESS SPENDING (or MORE INCOME) entered as a positive number. ....................... Correct or not? ....................... And I don't see any difference between labeling the above as PENSION vs OTHER.
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Old 03-14-2019, 11:16 AM   #7
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Originally Posted by Bongleur View Post
But the bottom line is that MORE spending should be entered as a negative number, and LESS SPENDING (or MORE INCOME) entered as a positive number. ....................... Correct or not? ....................... And I don't see any difference between labeling the above as PENSION vs OTHER.
Not so.
Whether you enter a "Pension" number or an "Off Chart" number, the number should be entered as a positive number.
The "Pension" number will be treated as income or effectively a reduction of expenses and the "Off Chart" number will be treated as an expense number.
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Old 03-17-2019, 10:09 PM   #8
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Firecalc is interesting and robust but not all that intuitive. Try The Ultimate Retitrement Calculator from the financialmentor website. I thought it handled future changes quite well..

https://financialmentor.com/calculat...ent-calculator
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Old 03-18-2019, 04:49 AM   #9
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OP, cry me a river. It's a tool - not a surgical suite.
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Old 07-30-2019, 07:49 PM   #10
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Originally Posted by Retired Expat View Post
Firecalc is interesting and robust but not all that intuitive. Try The Ultimate Retitrement Calculator from the financialmentor website. I thought it handled future changes quite well..

https://financialmentor.com/calculat...ent-calculator
I will repeat myself on this thread in case someone missed it. The calculator above is based on linear, fixed sequence of returns, assuming the same return every year, and the same inflation rate every year. It DOES NOT account for sequence of returns risk, which are very real, except, perhaps, in the past 10 years. I would not rely on this calculator, and consider it dangerously misleading at best. Use at your own risk (of running out of $).
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