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Old 10-08-2017, 10:48 AM   #21
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...Factoring in Fed/State taxes is where I find most difficulty/uncertainty when using FC.
How long I will actually live is the #1 unknown factor for me. And we all shine on....
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Old 10-08-2017, 11:13 AM   #22
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Not much. We are planning to relocate out of the VHCOL and very crowded Bay Area and use our home equity to relocate and ultimately purchase a smaller home for cash in a lower cost area. Will rent for a year or so to make sure we like the area. So, we have developed a budget based upon a 3.5% withdrawal rate. This doesn’t include DW’s current SSDI, my future SS, or expected inheritances. If need be, we could reduce the withdrawals to 2.5% and still live pretty well.
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Old 10-08-2017, 11:14 AM   #23
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I have used FireCalc and Fidelity RIP and a few others to give me confidence in making the decision. As many as 30 years ago I was doing this preparation on a 1-page paper fill-in-the-blank formula, planning for ER. Is any of this a guarantee? No. There are no guarantees in life. I could be killed by a Mack truck tomorrow, or worse, just maimed.

When all the planners give me the answer that we (DW and I) can live the rest of my and DW's life at or above the level that I have lived these past 65 years, then I have the confidence to move forward. I have partially tested "the plan" living these past 8-9 years on a PT income less than 1/2 of my previous income and have recovered from the last recession, and then some.

Being within SS claiming age and having SS cover most of my fixed "nut" makes a big difference to me and our confidence than some others on this site.
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Old 10-08-2017, 12:49 PM   #24
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My two mainstays are Quicken Lifetime Planner and Firecalc. I like Quicken Lifetime Planner because it is simple, easy-to-use, comprehensive and intuitive. However, since it is a deterministic planner (I have to provide investment return assumptions) it does not address sequence of returns risk. I use Firecalc to assess sequence of returns risk using the same data and assumptions that I use in QLP to the extent possible. I also periodically look at Financial Engines since it is linked to my Vanguard accounts. Since I have been retired, I use these to check on my progress and whether it is prudent to ratchet up spending so we don't leave the kids a bundle.

When I was preparing to retire I ran just about every free calculator known to man at the time.... they all gave me different versions of a green light.
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Old 10-08-2017, 01:24 PM   #25
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How long I will actually live is the #1 unknown factor for me. And we all shine on....
For retirement planning I never guess how long I will actually live. I just guess an upper limit to that, which is easier. Here's how I attempt to logically determine what that upper limit could be:

The upper bracket: The oldest person alive right now is 117. My oldest ancestor died at 104 and I have several other centenarians in my family tree. My own mother lived to 98.

The lower bracket: I am not nearly as healthy she was, or as most in my family are, due to my continuing struggles with overweight and diabetes. I am going strong at 69 so far but do not feel much like a kid any more.

So, I usually guess the oldest I could possibly live, to be 95. I use 95 in FIRECalc. I used to use 100 until I got Type 2 diabetes when it seemed logical to reduce that age a bit.

As I draw closer to the end and have more information about my ultimate state of health, I can tweak my financial plan accordingly.
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Old 10-08-2017, 01:38 PM   #26
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I've used it to model quite a few scenarios. I use it to model the % remaining portfolio method.

I had already retired when I found it, but I was already familiar with the basic portfolio survival studies, so I knew I was taking a conservative approach already.

Now I've just used it to model things like - historically, how much did the portfolio shrink using my current allocation compared to various withdrawal rates. This just lets me get an idea of how much variability in income one might expect, as well as the range of remaining portfolio values. It has helped me plan strategies for managing income variability.
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Old 10-08-2017, 04:54 PM   #27
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I, too, use FireCalc and Quicken Lifetime Planner the most, but I have used many other tools also. All the tools put me in the same approximate spending category.

When I first started to look at retirement tools in about 2003, T. Rowe Price had a very detailed and sophisticated Monte Carlo tool that I really liked. They have since dumbed down the input and simplified the output to make it more appealing to those who are not engineers or mathematicians.
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Old 10-08-2017, 05:28 PM   #28
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I have used FireCalc and Fidelity RIP and a few others to give me confidence in making the decision.

I used FireCalc in the early stages of trying to decide if I was financially ready to retire. I viewed it as one step better than the 4% rule. Admittedly, I was not using all the functionality of the program.

I like the Fidelity RIP model better only because it is easier for me to handle. It was much easier for me to enter in all my expenses which I felt was very important to get a better handle on inflation. When you enter in all the expenses specifically (versus a general amount per month), it inflates them at different rates - i.e., food is not as likely to inflate as quickly or as high as healthcare.

I've only used the two, but I feel like they are enough as long as you know how they work and make sure you enter in all the fields. I learned a long time ago using tax software, once you override something or enter in some dummy data, either of which go around the logic built into the application/software, then you're on your own.
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Old 10-08-2017, 05:28 PM   #29
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I use it as a periodic gut check for sequence of returns risk... As we are in a bull market - a bear could be waiting in the wings.
I make sure to input MY asset allocation, vs the defaults.
I run it with 30 years, 35 years, and 40 years... because 40 years probably excludes some bad historical years.

I also run Fidelity's calculator, financial engines, QLP, i-Orp....

I do this about 2 times a year - or more often if I'm thinking of making some changes.

FWIW - Firecalc has more than just the historical data to back test. You can also run it with random portfolio changes (with standard deviations settable)... this is pretty much a monte carlo.

I like firecalc because it's pretty easy and pretty comprehensive. As others mentioned - you have to guess at your taxes as a part of your spending... but so far my taxes have been far less than I predicted so my guesses were far too conservative... but like a lot of things... taxes could change in the future.

With Fidelity RIP - it's nice that you can set inflation rates on categories - I set the medical insurance inflation much higher... and so far haven't been wrong. I also set college spending higher (since that's still ahead of us)... again - that seems to be a good guess on my part.
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Old 10-08-2017, 05:36 PM   #30
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Originally Posted by W2R View Post
For retirement planning I never guess how long I will actually live. I just guess an upper limit to that, which is easier. Here's how I attempt to logically determine what that upper limit could be:

The upper bracket: The oldest person alive right now is 117. My oldest ancestor died at 104 and I have several other centenarians in my family tree. My own mother lived to 98.

The lower bracket: I am not nearly as healthy she was, or as most in my family are, due to my continuing struggles with overweight and diabetes. I am going strong at 69 so far but do not feel much like a kid any more.

So, I usually guess the oldest I could possibly live, to be 95. I use 95 in FIRECalc. I used to use 100 until I got Type 2 diabetes when it seemed logical to reduce that age a bit.

As I draw closer to the end and have more information about my ultimate state of health, I can tweak my financial plan accordingly.
Me, too. I use age 96 for the Quicken Lifetime Planner, and hoping that if I live that long my mind will still be good. I've seen a few folks who were about that age, but whose minds were no longer "working"--and thinking what's the use being that old if you are essentially lying in bed all day with nary a thought.
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Old 10-08-2017, 06:23 PM   #31
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My oldest ancestor died at 104 and I have several other centenarians in my family tree. My own mother lived to 98.

As I draw closer to the end and have more information about my ultimate state of health, I can tweak my financial plan accordingly.
I've had one great grandparent that lived to over 100 and my parents, my grandparents and most aunts and uncles have all lived (or are still living) into their 90's.

My original planning basis before retiring was 100 for myself. However I now realize that "ain't" in the cards, so I've reduced that estimate to about 85 and that may be optimistic. As I've mentioned in other related threads, I've seen all my relatives in their 90's and I don't want any part of living (?) like that.
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Old 10-08-2017, 06:37 PM   #32
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I've looked at a hundred different ways sideways. They all come close enough for me and my DH and our DLabs.
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Old 10-14-2017, 07:27 PM   #33
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When I compare FireCalc to the Fidelity, Vanguard, ******* , or schwab calculators it definitely seems to be the most optimistic.
To be on the safe side I cut my current balance by 30% my success ratio % doesn't go down too much so I'm hopeful I don't run out of money!
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How much do you rely on FireCalc?
Old 10-14-2017, 07:32 PM   #34
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How much do you rely on FireCalc?

I remember Firecalc to be about the same as VG as for the spending level. I get the lowest spending result with FIDO (even after adding the taxes). I currently spend much less than the amount FIDO says I could, to be on the safe side. Firecalc, VG planner and FIDO are all good tools, but obviously, none of them will be 100% accurate.
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Old 10-14-2017, 07:52 PM   #35
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I can't even remember how much or little I used FC before pulling the trigger. I know I wasn't obsessed with it. IMO the biggest risk in it is that it's only as good as the data you put into it, namely, your expenses. If you underestimate, that 95-100% success rate could drop a lot. You can have the best, most accurate tool in the world, but if you put garbage in, you'll get garbage out. I don't remember if I used any other planning tools, or if I just looked at the 4% "rule" and realized for my age it should probably be more like 3.5%.

I got pretty obsessed with studying my budget plan with a critical eye to make sure I wasn't forgetting anything somewhat likely, that my estimates were reasonable, and trying to figure out what kind of buffer I should have for a reasonable number of unlikely but possible events. Finally I looked at how many expenses could be trimmed without too much sacrifice if I had to, and how downsizing my house if needed could increase my funds.
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Old 10-14-2017, 08:12 PM   #36
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if I just looked at the 4% "rule" and realized for my age it should probably be more like 3.5%.

.

When you say "at my age" can I ask what age you retired at?

I understand the 4% "guideline" is for a 30 year retirement, but if someone is expected to start receiving SS in 15-20 years you can raise that withdrawal rate up to 5% as the withdrawal number you take out once SS kicks in will go down substantially...

thanks
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Old 10-14-2017, 08:21 PM   #37
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I retired well before I first used FireCalc. Like all the others it said I was good to go.

So zero I guess.
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Old 10-14-2017, 08:22 PM   #38
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When you say "at my age" can I ask what age you retired at?

I understand the 4% "guideline" is for a 30 year retirement, but if someone is expected to start receiving SS in 15-20 years you can raise that withdrawal rate up to 5% as the withdrawal number you take out once SS kicks in will go down substantially...

thanks
I retired at 49. I include NPV of 75% of SS + my smallish pension in my "net worth" (what I multiple my WR with) because it is conceptually easier for me than trying to figure out that I can spend x+y% until 65, and x+z until 62-70, whenever I start SS. The net effect is that I am spending, or at least budgeting to spend, a greater % of my investments now than I will when I start collecting SS and pension.
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Old 10-14-2017, 08:30 PM   #39
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I retired at 49. I include NPV of 75% of SS + my smallish pension in my "net worth" (what I multiple my WR with) because it is conceptually easier for me than trying to figure out that I can spend x+y% until 65, and x+z until 62-70, whenever I start SS. The net effect is that I am spending, or at least budgeting to spend, a greater % of my investments now than I will when I start collecting SS and pension.
I'm a little confused...so if i'm expected to get $35,000 pre tax per year at age 70 I take 75% of that ($26,000 pre tax) and deduct that from my "spending" on Firecalcs first page?
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Old 10-14-2017, 08:41 PM   #40
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I don't use it at all. As long as I only use 60% of my pension & dividends I figure I'm good
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