How Does FireCalc Handle Recent Stock Market Results

[mhitton2004]

Question: If you run FireCalc with say 30 years of Retirement, it appears to run scenarios all predating the last 30 years stock market results, because it has insufficient full 30 year scenarios - True? If not, how does it handle this.

 

[Senator]

It assumes that whatever 30 year period has occurred in the past, beyond the most current 30 year period, will not be statisically different that the most current 30 year period.

 

[Animorph]

FIRECalc doesn't "manufacture" any scenarios in order to extend current data into the future. It has to stop running 30 year scenarios when it only has 29 years of historical data left. Doing anything else would require some guessing.

 

[REWahoo]

Question: If you run FireCalc with say 30 years of Retirement, it appears to run scenarios all predating the last 30 years stock market results, because it has insufficient full 30 year scenarios - True? If not, how does it handle this.

Not true.

As Animorph says, it runs successive 30 year periods until it reaches a point where the results from the year 2013 are "year 30" of the run. This run would include the the 30 year period beginning in 1984 and ending in 2013.

To understand how FIRECalc works, take a look here and scroll down to "How about describing FIRECalc step by step?"