FIRECalc Results

[street]

I have a question about the FIRECalc Results page. I looked but couldn't find exactly when that Calculator was born but has anyone that has used it many years ago witness the high/higher results in real life portfolio results. I do know there are 118 different scenarios but the high end results seem a little bizarre or radical. LOL I'm looking for some one that have seen these results and or could they even be possible?

I not condemning the Calculator just simply want to understand if anyone has come close to the high returns or middle of the pack results that it shows.

 

[Rianne]

I agree, the ending portfolio possibilities seem extreme with FIRE.Calc. I use a variety of calculators, compare and contrast. This one was posted here, sometime in the past and I bookmarked it. Also, the Vanguard Nestegg seems realistic. It's all a crap shoot as far as I'm concerned. We can only live happily day by day and hope for the best.
https://engaging-data.com/will-money-last-retire-early/

 

[SecondCor521]

They certainly could be possible. But just as running out of money on the low end is relatively unlikely, amassing a huuuge fortune is also unlikely.

I have about 25% more dollars now than when I retired 3 years ago, and that's after living off my stash during those three years and paying for private high school and college for my three kids during that time frame. So my "line" has started out well so far. Things could change.

There is a wide variation in results over 30 or 40 years; that is just the result of variations being compounded over time. If one is looking for what to "expect", I think looking to the middle of that wide range (where the big mess of lines is) would be reasonable. I also think that people spending more in good times and cutting back in bad times has a natural tendency to moderate the results somewhat, creating even more of a central tendency than the graphs would imply.

 

[pb4uski]

....has anyone that has used it many years ago witness the high/higher results in real life portfolio results. ...

We would probably qualify for that... we retired at the end of 2011 have had a higher than average withdrawal rate because my pension and SS didn't kick in yet, but despite the higher withdrawal rate our nestegg is much higher than when we retired. Luck of the draw.

A hypothetical retiree who retired in Jan 2012 and had inflation adjusted withdrawals at a 5% WR would have 38% more today than when they retired... so that is very possible.


https://www.portfoliovisualizer.com...location1_1=60&symbol2=VBMFX&allocation2_1=40

 

[street]

I most definitely have a larger portfolio today then the day I walked out the door, like most here, even after living expenses.

I can see maybe middle number results like SecondCor521 said, but the numbers at the top of those results seem very high. It sure is interesting scenarios though, for the mind to wonder. If that could be the case I would have some large reserves for charity.

Rianne >>> thanks for that calculator link.

 

[SumDay]

I agree, the ending portfolio possibilities seem extreme with FIRE.Calc. I use a variety of calculators, compare and contrast. This one was posted here, sometime in the past and I bookmarked it. Also, the Vanguard Nestegg seems realistic. It's all a crap shoot as far as I'm concerned. We can only live happily day by day and hope for the best.
https://engaging-data.com/will-money-last-retire-early/

Nest Egg doesn't take SS & pensions into account. I agree 100% that it's all a crap shoot, and I wake up each day being hopeful.

 

[USGrant1962]

Those skyrocket scenarios generally involve retiring right after a crash. So they are unusual because you would have needed enough assets to ride the crash down and the confidence to retire on what's left at the bottom.

I've found that setting the market performance date in FIRECalc at 1929 instead of 1871 eliminates a bunch of the high cases without changing the bottom line number of failures (with moderate AAs). IMO it makes for a more reasonable graphical representation. It does change the success % - but I find that number kind of strange in FC anyway. If I can survive the Great Depression and Stagflation I don't really care about a bunch of earlier cases showing up in the numerator.

 

[street]

^ nice! I will give that a try, thanks.

I did that and I remembered I had did that before. Even with the change of years for data collection the high end results are high IMO. I guess if a person lived in the right time and the stars aligned it could be possible. LOL

 

[Dtail]

I think one needed to retire in 1982. lol

 

[firedata]

Who knows what the future will bring in terms of outcomes? I think may "experts" expect lower average returns in the future than what we've seen in the past, but there's no guarantee of that. If they are right, then yes, it's likely that you won't see those crazy high amounts from your portfolio at the end of your retirement, but those outliers aren't really critical. The main questions have to do with the scenarios that you are maintaining your principal or dipping below your initial amount. the website calculator that Rianne posted shows the frequency of those events quite clearly.

They certainly could be possible. But just as running out of money on the low end is relatively unlikely, amassing a huuuge fortune is also unlikely.

I have about 25% more dollars now than when I retired 3 years ago, and that's after living off my stash during those three years and paying for private high school and college for my three kids during that time frame. So my "line" has started out well so far. Things could change.

There is a wide variation in results over 30 or 40 years; that is just the result of variations being compounded over time. If one is looking for what to "expect", I think looking to the middle of that wide range (where the big mess of lines is) would be reasonable. I also think that people spending more in good times and cutting back in bad times has a natural tendency to moderate the results somewhat, creating even more of a central tendency than the graphs would imply.

SecondCor521, with 25% more, you could "restart" your retirement with a lower withdrawal rate and from a historical probability standpoint be less likely to fail. assuming you started at 4% withdrawal ($50k/yr spending and $1.25M initial starting point), you are now at $50k/yr spending and $1.56M starting point which is a 3.2% withdrawal rate. So that's a good thing!

 

[audreyh1]

I have a question about the FIRECalc Results page. I looked but couldn't find exactly when that Calculator was born but has anyone that has used it many years ago witness the high/higher results in real life portfolio results. I do know there are 118 different scenarios but the high end results seem a little bizarre or radical. LOL I'm looking for some one that have seen these results and or could they even be possible?

I not condemning the Calculator just simply want to understand if anyone has come close to the high returns or middle of the pack results that it shows.

Sure, you retire right at the bottom of a bear market, and go through a major bull, so your portfolio goes up a lot, yet you are only taking out a small fraction of the initial value inflation adjusted.

That is a weakness of the traditional SWR method. It’s designed to survive the worst case scenarios, so in the best case scenarios way less is withdrawn than the portfolio can support and a great deal is leftover when someone passes.

A reason I prefer the %remaining portfolio method or something like VPW which is more aggressive in draining the portfolio.

 

[SecondCor521]

SecondCor521, with 25% more, you could "restart" your retirement with a lower withdrawal rate and from a historical probability standpoint be less likely to fail. assuming you started at 4% withdrawal ($50k/yr spending and $1.25M initial starting point), you are now at $50k/yr spending and $1.56M starting point which is a 3.2% withdrawal rate. So that's a good thing!

Yes, I could. In fact, that's what my plan calls for.

I'm currently at about a 1.55% WR. So I have other problems.

The only excuse I really have is that I haven't received my second son's financial aid package yet. It should come in the mail in the next few days.

 

[firedata]

Yes, I could. In fact, that's what my plan calls for.

I'm currently at about a 1.55% WR. So I have other problems.

The only excuse I really have is that I haven't received my second son's financial aid package yet. It should come in the mail in the next few days.

whoa, a 1.55% WR is solid. That's a good problem to have I guess.

 

[latexman]

Those high end results are for Bezos, Gates, and Buffet.

 

[SecondCor521]

whoa, a 1.55% WR is solid. That's a good problem to have I guess.

Well, it's a hard one to complain about to one's friends.

Those high end results are for Bezos, Gates, and Buffet.

Not sure if you're joking, but no, that's not how FIREcalc works. The high end results are from retiring at the most optimal times in history, which is, by its nature, uncommon. You can read about how it works at its website.

 

[Chuckanut]

Yes, I could. In fact, that's what my plan calls for.

I'm currently at about a 1.55% WR. So I have other problems.
.

+1

Agreed. You need to spend more money.