Help Please - I don't understand

[beachfire]

This is most likely user error. But when I go into FIRECalc and put in all my parameters and hit "submit" I get the results page (success %, range of balances, avg balance, etc).

However, if I close that results page and then just immediately submit again without changing any parameters, I get different results. Can anyone help me understand?

 

[latexman]

I just opened FIRECalc, ran the default case, deleted the results page, ran the default case, deleted the results page, and ran the default case again. Same results all 3 times. Maybe some of the inputs were different?

 

[REWahoo]

This is most likely user error. But when I go into FIRECalc and put in all my parameters and hit "submit" I get the results page (success %, range of balances, avg balance, etc).

However, if I close that results page and then just immediately submit again without changing any parameters, I get different results. Can anyone help me understand?

If you chose the "random performance" option on the Your Portfolio tab, every run will have a different outcome. That's the nature of a Monte Carlo calculation.

If you didn't select that option, then something has changed in your inputs between runs. I did what you described above (not using random performance) and each run had exactly the same results.

 

[beachfire]

Thanks for the reply. You nailed it. That was my problem. Seems like random investment returns is the most realistic option to chose.

 

[REWahoo]

Thanks for the reply. You nailed it. That was my problem. Seems like random investment returns is the most realistic option to chose.

Many of us don't think so since that eliminates the key benefit of FIRECalc - looking at actual historical returns. Take some time to read this and it will explain how the calculator works and the benefit of looking at historical returns rather than random.

 

[audreyh1]

This is most likely user error. But when I go into FIRECalc and put in all my parameters and hit "submit" I get the results page (success %, range of balances, avg balance, etc).

However, if I close that results page and then just immediately submit again without changing any parameters, I get different results. Can anyone help me understand?

I've done plenty of runs and did not see this happen. I was always able to recreate prior results with the same inputs.

 

[REWahoo]

Audrey, he was using the Monte Carlo option...

 

[Blue Collar Guy]

This is most likely user error. But when I go into FIRECalc and put in all my parameters and hit "submit" I get the results page (success %, range of balances, avg balance, etc).

However, if I close that results page and then just immediately submit again without changing any parameters, I get different results. Can anyone help me understand?

This is a new feature. You take whatever result you like best.




.Only kidding, they gave you the answer glad you figured it out.

 

[beachfire]

Thanks for the link to the FIRECalc write up. I do like the results I get better when I use the historical returns dating back to 1871. But it still kind of feels like those of us that may be looking to retire in the next couple of years need to think about the sequence of return risk. Does the Monte Carlo approach provide some insight into that risk? I guess one can try to mitigate SOR risk through a bit more of a cash or short term Fixed income bucket to help ride through down markets. But there is opportunity cost in that approach. Thanks for the help on the tool.

 

[REWahoo]

But it still kind of feels like those of us that may be looking to retire in the next couple of years need to think about the sequence of return risk. Does the Monte Carlo approach provide some insight into that risk?

None that would give me any confidence.

 

[braumeister]

But it still kind of feels like those of us that may be looking to retire in the next couple of years need to think about the sequence of return risk.

Don't get too hung up on it. Just think about your personal risk tolerance in general.

The attached chart shows the S&P 500 over the last 20 years. I retired where the red arrow is pointing, so I understand a bit about sequence of return. The bigger picture is that markets tend to recover. My nest egg is far larger today than it was then, so I can confirm that.

 

[beachfire]

Very helpful. Thanks