Hiram
Dryer sheet wannabe
Hi,
Long time lurker here with my first question. I am about to pull the cord and retire but I keep running calculators to reassure myself. In doing that, I have come up with a question about whether I am using the manual entry of spending changes option in Firecalc properly.
I have a pretty good idea of my retirement income--DW's pension, my SS, an expected second house sale, a very likely inheritance and so on. I am 61 (expected retirement this year . . .) DW is 57 (expected retirement at 58). I am delaying SS until 70. DW doesn't get SS (she's a California teacher). That means for the next 8 1/2 years I will have to spend down my investments pretty rapidly.
I have tracked expenses over the last few years and developed a fairly detailed budget for retirement year by year. It shows we will spend quite a bit for the first years of retirement -- our house won't be paid off for another three years, for instance. With the sale of the second house and other one time chunks of income, our income and expenses vary a lot from year to year, at least for the next few years.
I didn't trust that I was getting these variations right by using the off the chart spending and pension entries--and there weren't enough entries for them anyway.
So instead of entering the pension and SS etc in the appropriate places on Firecalc, I made a spreadsheet that sums my expected expenses for each year and deducts that amount from the expected income for that year. (It is all done in today's dollars without inflation adjustments--including the future budgets and income). That leaves the amount I expect to have to withdraw from my portfolio for each year. I take the result for each year and enter it in the manual entry of spending changes.
Do you see a problem with this method rather than using firecalc's income entry sections?
Thanks for chiming in.
Long time lurker here with my first question. I am about to pull the cord and retire but I keep running calculators to reassure myself. In doing that, I have come up with a question about whether I am using the manual entry of spending changes option in Firecalc properly.
I have a pretty good idea of my retirement income--DW's pension, my SS, an expected second house sale, a very likely inheritance and so on. I am 61 (expected retirement this year . . .) DW is 57 (expected retirement at 58). I am delaying SS until 70. DW doesn't get SS (she's a California teacher). That means for the next 8 1/2 years I will have to spend down my investments pretty rapidly.
I have tracked expenses over the last few years and developed a fairly detailed budget for retirement year by year. It shows we will spend quite a bit for the first years of retirement -- our house won't be paid off for another three years, for instance. With the sale of the second house and other one time chunks of income, our income and expenses vary a lot from year to year, at least for the next few years.
I didn't trust that I was getting these variations right by using the off the chart spending and pension entries--and there weren't enough entries for them anyway.
So instead of entering the pension and SS etc in the appropriate places on Firecalc, I made a spreadsheet that sums my expected expenses for each year and deducts that amount from the expected income for that year. (It is all done in today's dollars without inflation adjustments--including the future budgets and income). That leaves the amount I expect to have to withdraw from my portfolio for each year. I take the result for each year and enter it in the manual entry of spending changes.
Do you see a problem with this method rather than using firecalc's income entry sections?
Thanks for chiming in.