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FIREcalc calculation questions
Old 01-19-2015, 01:57 PM   #1
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FIREcalc calculation questions

Somewhat confused with Firecalc?
Are the calc based on a 4% withdrawal and what is average interest it bases from? For instance, it states that at 400K I could take out 35K for 35 years with the basic figures I stated in the formula.



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Old 01-19-2015, 02:00 PM   #2
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Originally Posted by cnocmmz View Post
Somewhat confused with Firecalc?
Are the calc based on a 4% withdrawal and what is average interest it bases from? For instance, it states that at 400K I could take out 35K for 35 years with the basic figures I stated in the formula.
Spend a little time reading this and it will answer your questions: FIRECalc - How it Works
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Old 01-19-2015, 03:08 PM   #3
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Quote:
Originally Posted by cnocmmz View Post
Somewhat confused with Firecalc?
Are the calc based on a 4% withdrawal and what is average interest it bases from? For instance, it states that at 400K I could take out 35K for 35 years with the basic figures I stated in the formula.



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I guess it depends upon what your "basic figures" were. For example, withdrawing 35K for 35 yrs from a 400K portfolio using FC defaults provides a 4.6% success rate. Not really what you would want to do. Did you read the success rate in the summary?
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Old 01-19-2015, 03:30 PM   #4
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The success rate was at 100%. I put in wife's annual pension, and ss 24k and 6k for gov pension. That with the 400K at a 35K annual withdrawal rate came out with a 100% success with firecalc

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Old 01-19-2015, 03:33 PM   #5
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The success rate was at 100%. I put in wife's annual pension, and ss 24k and 6k for gov pension. That with the 400K at a 35K annual withdrawal rate came out with a 100% success with firecalc

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It counts your annual pension and ss too. So there's 30k of your 35K. You're only withdrawing 5K of the 400K. That will last forever, practically speaking.
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Old 01-19-2015, 03:52 PM   #6
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The success rate was at 100%. I put in wife's annual pension, and ss 24k and 6k for gov pension. That with the 400K at a 35K annual withdrawal rate came out with a 100% success with firecalc

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Great! so your SWR is 1.25% and well below 4%. Spend more!
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Old 01-19-2015, 04:15 PM   #7
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Yes the 5k is about right. I still have my 40k pension next year @ 56 and my 18k ss at 65.

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Old 01-22-2015, 03:05 PM   #8
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For FIRECalc "spending", do I enter my pre or post tax amount? My annual budget or annual income before taxes?
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Old 01-22-2015, 03:12 PM   #9
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FC does not account for taxes so you will have to add that amount into your expenses (spending).
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Old 01-22-2015, 03:12 PM   #10
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For FIRECalc "spending", do I enter my pre or post tax amount? My annual budget or annual income before taxes?
You generally would put in the amount you expect to withdraw from your retirement accounts. Most would agree this includes taxes.
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Old 01-22-2015, 03:21 PM   #11
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You generally would put in the amount you expect to withdraw from your retirement accounts. Most would agree this includes taxes.
Actually it is the amount you plan to spend, including taxes. Since you input expected pensions, SS, etc., those amounts aren't technically withdrawals from your retirement accounts, but FIRECalc accounts for them in your spending.
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Old 01-22-2015, 03:41 PM   #12
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Thanks for the input. So let's say I will have 80K worth of expenses. Some of my spending will come from pension and SS. But it will all be taxed. If my tax rate is 25%, I need to enter approximately 107k in the "spending" field. Correct?
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Old 01-22-2015, 03:46 PM   #13
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Yes, but I suspect your tax calculation is higher than you will actually experience. The 25% rate you quote is most likely the marginal rate, not your average tax rate, which will be lower. To get a more accurate estimate I'd suggest you run your expected retirement income (pension, SS, withdrawals, etc.) through TurboTax or a similar program.
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Old 01-22-2015, 03:49 PM   #14
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Yes, I plan to do that, thanks!
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