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How much attention do you pay to this FC message?
Old 04-24-2019, 12:27 PM   #1
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How much attention do you pay to this FC message?

On the Firecalc results screen, there is this paragraph:

Quote:
Here is how your portfolio would have fared in each of the 113 cycles. The lowest and highest portfolio balance at the end of your retirement was $132,847 to $6,704,966, with an average at the end of $1,991,092. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
I know this is a crazy question but how much do you focus on the part of the results message about LOWEST portfolio balance amount at the end of your retirement when you're at 100%?

I think I tend to give it too much attention. After all, success is success. But for some reason it bothers me when that number is "low" as if my retirement plan is right on the edge of success and failure.
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Old 04-24-2019, 12:36 PM   #2
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None whatsoever.
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Retired at 59 in 2014. Should have done it sooner but I worried too much.
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Old 04-24-2019, 12:39 PM   #3
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None whatsoever.
Not surprised, Mr. Blow that Dough!
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Old 04-24-2019, 12:39 PM   #4
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Originally Posted by Carpediem View Post
........ how much do you focus on the LOWEST portfolio balance amount at the end of your retirement when you're at 100%?.........
If it is less than zero, worry.
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Old 04-24-2019, 12:46 PM   #5
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Quote:
Originally Posted by Carpediem View Post
On the Firecalc results screen, there is this paragraph:



I know this is a crazy question but how much do you focus on the LOWEST portfolio balance amount at the end of your retirement when you're at 100%?

I think I tend to give it too much attention. After all, success is success. But for some reason it bothers me when that number is "low" as if my retirement plan is right on the edge of success and failure.
I pay quite a bit of attention because I use and model the % remaining portfolio withdrawal method and the average and lowest ending portfolio is a good measure of how strongly a given withdrawal rate will draw down the portfolio.

Unfortunately, Firecalc doesn’t give you the lowest portfolio value during the 30 or whatever year period. This is actually the most important number for the % remaining portfolio method, as it tells you how much your income could drop worst case during the period. I’ve had to manually determine the worst case runs, and then examine the annual data for each of those starting years.

The % remaning portfolio withdrawal method does not fail by running out of money. The question is how much your income might shrink over a bad run.
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Old 04-24-2019, 12:49 PM   #6
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I pay quite a bit of attention because I use and model the % remaining portfolio withdrawal method ...
That's very interesting. Thank you for pointing out another way of looking at it and using the results.
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Old 04-24-2019, 12:51 PM   #7
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I do key on the lowest. I think it's of some value to know that even at a 100% success rate, if I dodged the bullet of bankruptcy I want to know how close I came. Just barely? or missed me by a mile? Likewise if I'm in the red, am I in the red $1,000 or $10,000 after 30 yrs? Fairly trivial. Or have I been long gone below-zero for several years?

I also know this kind of thinking is at least 50% the kind of worry people create for themselves.
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Old 04-24-2019, 12:51 PM   #8
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If it is less than zero, worry.
True but on the other hand I probably wouldn't worry too much if I was at 98%.
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Old 04-24-2019, 12:56 PM   #9
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I do key on the lowest. I think it's of some value to know that even at a 100% success rate, if I dodged the bullet of bankruptcy I want to know how close I came. Just barely? or missed me by a mile? Likewise if I'm in the red, am I in the red $1,000 or $10,000 after 30 yrs? Fairly trivial. Or have I been long gone below-zero for several years?

I also know this kind of thinking is at least 50% the kind of worry people create for themselves.
This is similar to my thinking but then, are we creating a new Firecalc success criteria for ourselves of: 100% success and lowest ending balance > $xxx,xxx? I might never be able to retire if I did that.
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Old 04-24-2019, 01:11 PM   #10
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This is similar to my thinking but then, are we creating a new Firecalc success criteria for ourselves of: 100% success and lowest ending balance > $xxx,xxx? I might never be able to retire if I did that.
Yes. If there are no problems people will create one.
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Old 04-24-2019, 01:13 PM   #11
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Quote:
Originally Posted by audreyh1 View Post
I pay quite a bit of attention because I use and model the % remaining portfolio withdrawal method and the average and lowest ending portfolio is a good measure of how strongly a given withdrawal rate will draw down the portfolio.

Unfortunately, Firecalc doesnít give you the lowest portfolio value during the 30 or whatever year period. This is actually the most important number for the % remaining portfolio method, as it tells you how much your income could drop worst case during the period. Iíve had to manually determine the worst case runs, and then examine the annual data for each of those starting years.

The % remaning portfolio withdrawal method does not fail by running out of money. The question is how much your income might shrink over a bad run.
Arenít there existing FI calculators which will tell you this? For example, the Fido RIP tool (which uses Monte Carlo based on historical performance) provides annual portfolio value for each year during the specified retirement period.
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100% x 10% > 10% x 100%
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Old 04-24-2019, 01:14 PM   #12
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I give it some thought. I'll try not to divert this into yet another "when to take SS argument" but it's a reason why I'll probably hold out for the largest SS payment. If I live a long time and have bad returns and have to cut way back on how much I take from investments, a larger SS benefit will give me more to live on. I assume this is past the SS breakeven point, otherwise I'm unlikely to run out.
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Old 04-24-2019, 01:24 PM   #13
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If the ending balance bothers you, you can compensate using the "Investigate" tab. At the bottom of the page, set the minimum dollars to be left in the portfolio at all times, including the end.
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Old 04-24-2019, 01:28 PM   #14
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It was maybe 13 years ago when I ran firecalc. The low predicted was well above what I considered acceptable, very much less than a million.. The high was irrelevant to me as not likely. Today I am very comfortable with how finances are.
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Old 04-24-2019, 01:37 PM   #15
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Carpediem,

There is a known bug in FIRE Calc in the text portion for "the lowest portfolio balance at the END of your retirement". Here is three old posts that discuss it:

Lowest portfolio balance - 100% success

Firecalc over time calculations.

Question on minimum ending balance = starting balance

I do not know if it was fixed when recently updated. Be careful out there!
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