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FireCalc Question
Old 11-06-2009, 09:39 PM   #1
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FireCalc Question

I'm not sure I'm interpretting the Firecalc outputs correctly so I need some assistance in understanding the results.

Let's say you input expenses of $80K per year (including taxes) and a starting portfolio amount over a 30 year term and FireCalc calculates there is a 90% probability of success given those inputs. You then add SS into the model and it recalculates a 100% success rate.

My question is does that mean I can initially withdraw $80K from my retirement portfolio in ADDITION to the annual SS amount? Or does it mean I need to subtract the annual SS amount from my total expenses to determine how much I can safely withdraw from my retirement portfolio yearly and achieve a 100% success rate?

If it's the second interpretation that's correct, then I guess I can use the "Investigate" option to determine my spending level including SS that initially provides a 100% success rate for a given portfolio amount. Right?
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Old 11-06-2009, 10:35 PM   #2
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Ok..I'm a bit sleepy, but here goes. After you enter all your numbers including ss, go to the investigate page and check the box that says 'spending level' It will show you how much you can spend each year with a 100% success rate. (You have to key the 100% in the box)

IOW, it's my understanding you are right. See...I told you I am sleepy...
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Old 11-06-2009, 11:03 PM   #3
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Quote:
Originally Posted by freddyw View Post

My question is does that mean I can initially withdraw $80K from my retirement portfolio in ADDITION to the annual SS amount? Or does it mean I need to subtract the annual SS amount from my total expenses to determine how much I can safely withdraw from my retirement portfolio yearly and achieve a 100% success rate?
I believe FC is telling you that you can only withdraw 80K per year including SS and achieve 100% success rate over 30 yrs. You can increase the withdrawal amount to see when it falls below 100% and find the maximum you can withdraw. You can increase the amount if you can tolerate a below 100% success rate.
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Old 11-07-2009, 10:04 AM   #4
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It appears your answer is right in the FIRECALC text.

Quote:
Optional: Use Social Security or Pensions as the Primary Source of Your Spending Funds

If you leave this section alone, FIRECalc assumes there are no recurring sources of income and no recurring spending other than the initial spending you entered at the beginning. All of your retirement spending will come from your portfolio.
FIRECalc will first use any Social Security, pensions, or other adjustments that you enter below, and then take whatever else is needed to make up this amount from your portfolio at the start of each year.
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