Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-31-2011, 06:04 AM   #21
Recycles dryer sheets
 
Join Date: Dec 2009
Posts: 214
I have used both tools and prefer Fido RIP by far.

Some important differences:

1) FIREcalc does not consider taxes AT ALL. So you need to put in your expenses on a before tax basis. RIP looks at your various sources of income for each individual year, tIRA withdrawals, SS, Roth withdrawals, and CALCULATES your Fed and State tax. Big advantage to RIP.

2) The methodologies are completely different. FIREcalc uses actual market return series. RIP uses Monte Carlo approach. Therefore don't be surprised to get different results. I am not sure that one method is "better" than the other, both are widely used but be aware they use different methodologies.

3) If you donate to FIREcalc, you get the ability to vary expenses year by year. But only aggregate expenses. RIP lets you vary category by category - paying off your mortgage, Medicare Part B and Medigap kicking in, etc. The RIP then applies DIFFERENT rates of inflation to different budget categories, inflating health care expenses at a higher rate than general expenses. I find this more realistic.

So imho RIP is far superior but let's give Dory credit, he came up with FIREcalc on his own and FIDO probably spent millions on RIP. I think FIREcalc is a great little tool to do a quick and dirty when you are 40 and trying to see if it is possible to retire at 55. That is what I used it for. But when I was 55 I spent a lot of time with FIDO RIP before turning in my notice.
__________________

__________________
chemist is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-31-2011, 06:46 AM   #22
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
To answer your question I do not use Firecalc. Not sure how to use it. Would be interested in checking RIP. I much prefer this free online calculator Merrill Edge| See Where You Stand
Quote:
Originally Posted by Huston55 View Post
6. Which calculator do you prefer and why?

Hoping to hear from all who've used both tools.
__________________

__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 10-31-2011, 07:49 AM   #23
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Quote:
Originally Posted by ERD50 View Post
I recall my Dad saying that land was essentially worthless in the Depression, but if you had cash you could live like a king (deflation will do that for you, I guess).
Farm land wasn't worthless. My father's family ran a dairy in the Depression, and my father delivered milk. Not much cash then, but no standing in breadlines, either.
__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 11-03-2011, 05:03 AM   #24
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,803
Quote:
Originally Posted by chemist View Post
I have used both tools and prefer Fido RIP by far.

Some important differences:

1) FIREcalc does not consider taxes AT ALL. So you need to put in your expenses on a before tax basis. RIP looks at your various sources of income for each individual year, tIRA withdrawals, SS, Roth withdrawals, and CALCULATES your Fed and State tax. Big advantage to RIP.

2) The methodologies are completely different. FIREcalc uses actual market return series. RIP uses Monte Carlo approach. Therefore don't be surprised to get different results. I am not sure that one method is "better" than the other, both are widely used but be aware they use different methodologies.

3) If you donate to FIREcalc, you get the ability to vary expenses year by year. But only aggregate expenses. RIP lets you vary category by category - paying off your mortgage, Medicare Part B and Medigap kicking in, etc. The RIP then applies DIFFERENT rates of inflation to different budget categories, inflating health care expenses at a higher rate than general expenses. I find this more realistic.

So imho RIP is far superior but let's give Dory credit, he came up with FIREcalc on his own and FIDO probably spent millions on RIP. I think FIREcalc is a great little tool to do a quick and dirty when you are 40 and trying to see if it is possible to retire at 55. That is what I used it for. But when I was 55 I spent a lot of time with FIDO RIP before turning in my notice.
I've 'subscribed' to FIREcalc since the OP, and would have to agree with this post. I find RIP better for my situation: more flexibility on the expenses side, more accurate treatment of taxes (thus, more accurate net income answers), more 'what if' capability, and more tools to help make changes if you want (even though some of this is FIDO marketing, having the choices is useful).

Thx to all for your posts.
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
Old 11-03-2011, 08:05 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,337
For those of us who are acronymically challenged... What is RIP? What does it stand for? (Other than its use on tombstones.)
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 11-03-2011, 09:20 AM   #26
Thinks s/he gets paid by the post
ronin's Avatar
 
Join Date: Oct 2003
Posts: 1,191
RIP - Retirement Income Planner
__________________
We are, as I have said, one equation short. Keynes
ronin is offline   Reply With Quote
Old 11-03-2011, 12:39 PM   #27
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,803
Quote:
Originally Posted by ronin View Post
RIP - Retirement Income Planner
RIP-Retirement Income Planner is the Fidelity retirement planning and analysis tool. You have to be a Fidelity member to use the tool. Although, there may be a free trial available-not sure, since I have a Fidelity acct and use the tool.
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
Old 11-03-2011, 01:28 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by Huston55 View Post
more accurate treatment of taxes (thus, more accurate net income answers).
How do you know this? Or are you just saying that you haven't done much work, with the usual tools, to estimate your future tax burden and therefore anything RIP does regarding taxes is better than what you've done?

I'm not sure I trust RIP's implied accuracy regarding tax predictions 15 - 20 - 25 yrs or more out.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is online now   Reply With Quote
Old 11-03-2011, 01:41 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by chemist View Post
2) The methodologies are completely different. FIREcalc uses actual market return series. RIP uses Monte Carlo approach. Therefore don't be surprised to get different results. I am not sure that one method is "better" than the other, both are widely used but be aware they use different methodologies.

.
There is the real difference. The only important difference. And it's a big one.

I like RIP for some of its convenient features. But FireCalc is where I discovered and became comfortable with the fact that my FIRE portfolio performance is likely to be highly variable vs. my plans and a wild ride, over which I'll have only limited control, is likely.

I'm suspicious of any retirement planning tool that implies you're going to have accurate control over future results if your plan incudes a significant portion of your RE income coming from a FIRE portfolio. FIRECalc lays it right out there. Based on historical returns and inflation, it tells me that 30 yrs out I'll be somewhere between broke and having a multiple of my current wealth! I think that's about as accurate as it gets!
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is online now   Reply With Quote
Old 11-03-2011, 02:10 PM   #30
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,141
Quote:
Originally Posted by Huston55 View Post
RIP-Retirement Income Planner is the Fidelity retirement planning and analysis tool. You have to be a Fidelity member to use the tool. Although, there may be a free trial available-not sure, since I have a Fidelity acct and use the tool.
You don't have to have any money invested to be a "member". I tried it out last week without logging in. You can create a username to be a member and use the tool. Being an account holder has the advantage that you can use "Full View" and enter your login details for your financial institutions if you wish, and then the values of your holdings are imported for you.

Otherwise, you can enter gross amounts and your own breakdown percentages (Stocks/bonds/cash), or enter ticker numbers plus number of shares and have Fidelity work out the breakdowns.

The budget tools look to be the same whether you are an account holder or just a member.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 11-03-2011, 02:15 PM   #31
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,803
Quote:
Originally Posted by youbet View Post
How do you know this? Or are you just saying that you haven't done much work, with the usual tools, to estimate your future tax burden and therefore anything RIP does regarding taxes is better than what you've done?

I'm not sure I trust RIP's implied accuracy regarding tax predictions 15 - 20 - 25 yrs or more out.
I'm comparing what RIP does do (estimates taxes based on Fido's edtimated optimum withdrawal strategy; taxable, deferred, Roth, etc.) to what FIREcalc doesn't do; no estimate of taxes. So, yes I'm saying RIP is better for me because it does this calc.

Regarding the question of Fido/RIP's accuracy estimating taxes, I can't speak to that. I haven't done my own estimate, other than high level crude ones. Thus, I have no detailed analysis to compare RIP's tax results to. So, I'm accepting the accuracy of Fido/RIP's tax estimate at face value (and my own 'ho ho' test looking at it on RIP's detailed annual cash flow analysis report). But, I'm also accepting a lot of other algorithms in both tools at face value, and am willing to accept that.

Having said all that, I do like to use multiple tools (RIP, FIREcalc, and Hebeler's Analyze Now) to confirm the answers I get, and take comfort when they're all giving me comparable answers. But, so far, I like the RIP tool best.
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
Old 11-03-2011, 02:18 PM   #32
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,803
Quote:
Originally Posted by Alan View Post
You don't have to have any money invested to be a "member". I tried it out last week without logging in. You can create a username to be a member and use the tool. Being an account holder has the advantage that you can use "Full View" and enter your login details for your financial institutions if you wish, and then the values of your holdings are imported for you.

Otherwise, you can enter gross amounts and your own breakdown percentages (Stocks/bonds/cash), or enter ticker numbers plus number of shares and have Fidelity work out the breakdowns.

The budget tools look to be the same whether you are an account holder or just a member.
Alan

Thx. Good to know when discussing with friends who are curious about RIP.
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
Old 11-03-2011, 02:24 PM   #33
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,141
Quote:
Originally Posted by Huston55 View Post
Alan

Thx. Good to know when discussing with friends who are curious about RIP.
I expect it is also a marketing tool. Being a member means they keep your details from one log in to the next so folks are likely to use it repeatedly since updates of their details are easy. Maybe some of the members become account holders.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 11-30-2011, 06:04 AM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,627
I just noticed this thread went on without me.

I wanted to point out another retirement income planner that I have found useful:

Jim C. Otar's Retirement Optimizer. It's a spreadsheet you download and away you go. It has FIRECalc-like algorithm which Otar has called an "aft-cast", but lots, lots more, like plugging in laddered SPIAs.

A good list of such calculators with links:
Wiki article link: Retirement calculators and spending
__________________
LOL! is offline   Reply With Quote
Old 11-30-2011, 12:36 PM   #35
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by LOL! View Post
Jim C. Otar's Retirement Optimizer. It's a spreadsheet you download and away you go. It has FIRECalc-like algorithm which Otar has called an "aft-cast", but lots, lots more, like plugging in laddered SPIAs.
I've been researching/reviewing retirement calculators and coincidentally I just finished going through Otar's website a few hours ago (for tomorrow's post). It looks like he's put a lot of work into his upgrade. I remember the fuss when he published his book a couple years ago, but not too many people are dismissing his annuity ideas these days.

Problems with retirement calculators | Military Retirement & Financial Independence
Retirement planners and calculators (part 1 of 2) | Military Retirement & Financial Independence
USAA on retirement calculators | Military Retirement & Financial Independence (available to anyone, not just USAA members)

Quote:
Originally Posted by LOL! View Post
A good list of such calculators with links:
Wiki article link: Retirement calculators and spending
I stumbled across that link, too. Great reference.

I'll put up the second part/final post on Thursday 1 Dec 5 AM HST.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 11-30-2011, 01:45 PM   #36
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: Milford, OH
Posts: 2,085
Quote:
Originally Posted by ERD50 View Post
I agree with all except the above line.

Sure, we don't know that a past 90% scenario will play out to be 90% in future scenarios. But, a scenario that indicates a 95% success rate will certainly be more resilient than one that indicates an 85% success rate.

Even if we accept the 20% error estimate, that error would apply pretty much equally to all the scenarios. It doesn't justify saying that 95% and 85% are pretty much the same.

An analogy: We take two identical cars, with identical driver habits, - fill one with 8.5 gallons of gas, another with 9.5 gallons of gas. We could run multiple tests, driving the two cars together on a variety of traffic scenarios. We may only have ~ 20% accuracy in predicting how far they go, due to variations in the trip. But it is clear that the one with more gas will go further.

I really think Bernstein is talking in terms of absolute accuracy of these tools (does 95% mean 95%?), not their relative accuracy (is 95% > 85%?).

-ERD50
I don't need to be successful 95% of the time or 85% of the time. I need to be successful the one time I do it. I only have "one shot" at doing it right.

It is more important to know what variable caused the 10% difference? If a person changes allocation and sees the results change, great, if a person changes the age and sees results change, even better. If a person changes the starting investment amount for the better result, excellent.

A person should do more than one Monte Carlo to see what their risks are. Just because most of us use the same calculator does not mean we have the same risks. Focus on the differences which generate the success rates, and why one is more successful than the other- that is the true value of those tools, IMO.
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Old 11-30-2011, 08:48 PM   #37
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,803
Nords & LOL-

Great links; some new ones here I will check out. Thanks much.
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
Old 12-01-2011, 02:05 PM   #38
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Here's the second part:
Retirement planners and calculators (part 2 of 2) | Military Retirement & Financial Independence
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 01-31-2012, 05:08 AM   #39
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 1,803
Quote:
Originally Posted by youbet View Post
There is the real difference. The only important difference. And it's a big one.

I like RIP for some of its convenient features. But FireCalc is where I discovered and became comfortable with the fact that my FIRE portfolio performance is likely to be highly variable vs. my plans and a wild ride, over which I'll have only limited control, is likely.

I'm suspicious of any retirement planning tool that implies you're going to have accurate control over future results if your plan incudes a significant portion of your RE income coming from a FIRE portfolio. FIRECalc lays it right out there. Based on historical returns and inflation, it tells me that 30 yrs out I'll be somewhere between broke and having a multiple of my current wealth! I think that's about as accurate as it gets!
I just discovered another feature of Fido RIP, one related to the important aspect of variability.

When running a scenario recently, I noticed in the detailed cash flow summary that the starting portfolio value was about 12% lower than our current portfolio value. Since the hypothetical retirement year I used in the tool was only one year from now, that puzzled me. When I asked Fido, the RIP tool team said that because the tool is set to give a high confidence level (>=90%) that it automatically includes what would be one of the worst scenarios (big decline early in retirement).

I'd never noticed this before. The explanation was comforting, since this would be one of the worst ER scenarios. Meaning, if my portfolio survived in the RIP scenario, I could take a 12% hit the first year of FIRE and still come out OK.

Has anyone else noticed the same pattern when using RIP?
__________________
You may be whatever you resolve to be.
Huston55 is online now   Reply With Quote
RIP import?
Old 04-25-2012, 01:40 PM   #40
Recycles dryer sheets
 
Join Date: Apr 2012
Posts: 149
RIP import?

Quote:
Originally Posted by Alan View Post
Being an account holder has the advantage that you can use "Full View" and enter your login details for your financial institutions if you wish, and then the values of your holdings are imported for you.
I'm new here, and I know that this is an older thread. I've been running RIP for several weeks, and I don't see where I can add login details of other financial institutions. Can you point me to that feature?
Thanks
Dan
__________________

__________________
Steelart99 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Social Security/Medicare rip off l2ridehd Health and Early Retirement 54 10-24-2011 11:13 AM
Schwab vs. Fidelity vs. Vanguard panacea FIRE and Money 21 10-04-2011 09:46 PM
How to properly identify a vested deferred defined benefit pension in FIRECalc? nico08 FIRE and Money 2 09-25-2011 08:51 PM
fidelity 401k - what to invest in? floridanurse FIRE and Money 16 08-20-2011 03:49 AM
FIRECalc is not working? wanaberetiree FIRECalc support 3 07-31-2011 10:19 PM

 

 
All times are GMT -6. The time now is 12:18 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.