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How much do you rely on FireCalc?
Old 10-08-2017, 04:40 AM   #1
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How much do you rely on FireCalc?

I've started using more of the features of FC lately (adding in pension, SS income, etc) and it is giving me 100% success rate.
Seems too good to be true, for my overly conservative way of thinking.

How much to rely on FC results?
What do folks do factor in more margin etc?
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Old 10-08-2017, 05:31 AM   #2
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I am not an expert who has researched and understands the subtleties behind FC.

I do use FC and I find it useful but do not totally rely on it. I just had Vanguard run one of their "freebie" financial plans just for a sanity check. I also use numerous other calculators (e.g iORP, ESP Planner, *******, (the list goes on)...).

Factoring in Fed/State taxes is where I find most difficulty/uncertainty when using FC.
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Old 10-08-2017, 05:52 AM   #3
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skiddish...
Firecalc at least was primarily a back testing planner back when I used it (or that was a limitation I think was there at the time). That brings into question if there is enough data to model everything. RIP is monte carlo retirement planner (uses a statistical model). This brings up the question if the statistical model is representative.

In either case.. if you had 5% change of failure, that would mean you have a 95% chance of success. What this means? You are more likely to have lots of $ left over with a 5% failure calculation.
If I recall you noted that you are a high tech electrical engineer. Think of retirement estimation as a stochastic modeling problem (like a communications system). It's pretty easy to know where it will work well and where if fails horribly.

It's more difficult in retirement to plan a fixed withdraw plan that will leave you at zero when the last one passes. I plan on using a more dynamic withdraw scheme. I know the figure the calculators came up with and I think I know the minimum I can live on. With this known, I just spend what I want and only track things I need for taxes. This is pretty much what I've done since a couple years out of school.

in short... I use it as a guideline. I would expect when my mind starts going that I will need to have a mechanized process or someone to help me. But that should be many years down the road
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Old 10-08-2017, 06:20 AM   #4
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Haven’t used it in years. Been retired for 11 years, so if I haven’t figured out a reasonable withdrawal method by now I’m in trouble. Also, Firecalc not as relevant to me because my portfolio is all in Canadian securities, and even then isn’t representative of the whole Canadian market. Also, since I have generally just spent the income generated by the portfolio, Firecalc not really useful.

Did look at it a couple times when I first retired and it was how I found this community.
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Old 10-08-2017, 06:21 AM   #5
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I used Firecalc, and many others.

I assumed my income would be half of what I was projecting, and my expenses would be double.

Quitting a job in your 50's is no joke. It doesn't take too many days and you are unemployable, except as a WalMart greeter, or worse. It may be the most important decision in your life.

If you run short of funds, your lifestyle can be irreversibly changed for the worse.
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Old 10-08-2017, 06:25 AM   #6
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I used lots of calculators before retiring and FC became my favorite, primarily because it was easy to understand what it was doing -- running your situation through historical cycles to see how you would have fared. It was always clear to me that 100% success against past cycles was no guaranteed of success in the future. But, it was a good starting point. Actual ER was gradual with me earning some consulting fees briefly and DW delaying ER by about 5 years. By then our situation improved to where our withdrawal rate was significantly under FC's 100% level. Because of that I have not run FC in years and would only do so if I wanted to drastically increase my spend rate for some reason.
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Old 10-08-2017, 06:47 AM   #7
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I look at firecalc as but one tool in the toolbox. All of them are only mathematical models using historical data or statistical parameters input by the user. There ain’t no crystal ball and no one can accurately predict the future. I don’t get hung up on the difference between 95% and 100%. That’s like measuring with a micrometer and cutting with an axe.
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Old 10-08-2017, 06:50 AM   #8
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To me it's just another retirement calculator, albeit one of the better ones IMO. I built my own detailed spreadsheets before I retired, which I felt comfortable with and just used FireCalc as a validation tool. Now that I'm retired, I don't use any of these tools except a very simple spreadsheet that tracks my NW from year to year.
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Old 10-08-2017, 07:17 AM   #9
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Although I occasionally play around with other calculators/planners etc, Firecalc is the one I use by far the most. I don't think it would be fair to say that I "rely" on it though as, with a WR that is a smidgin over 2% of the current portfolio value, and SS coming online in the future, I don't think there's a planner or calculator around that would tell me I'm on shaky ground. Nevertheless, it's fun to input higher numbers to see how much I might be able to increase my spending in the future, if needs or wants dictate.
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Old 10-08-2017, 07:39 AM   #10
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But regardless of which calculator and how much one relies upon them, I'm not aware of any way to know--for sure--if they're accurate until it's too late.

Twenty years from now I'll either have $90K left or $14MM. Not a comforting range if you're looking for accuracy.

I find FC to be the easiest to use with minimal clutter. I like 'windage' information and don't trust calculations that get down to five decimals.

Life just has far too many variables both anticipated and unanticipated to be able to make firm predictions. Regardless, I think if you try 3 or 4 systems and find that each one is within a reasonable range you're likely going to be ok.
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Old 10-08-2017, 07:48 AM   #11
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I guess "Rely on" is the wrong phrase to use. I wouldn't rely on one estimator.
I meant more like "believe in".

I'm going to go with a few more planners ... iOrp, Fidelity, etc as a sanity check as well.
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Old 10-08-2017, 07:55 AM   #12
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I find FIRECalc useful for looking at past historical returns, but I don't completely trust it for predicting my "safe" withdrawal rates. The numbers I come up with, even testing for 100% success, just seem too good to be true. Maybe I'm just overly conservative, but I would not feel comfortable spending the number Firecalc tells me I can spend at 100% success.
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Old 10-08-2017, 08:51 AM   #13
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I don't rely on any one tool. In the 4 to 5 years before ER, I mostly used my own spreadsheets. Later, I worked with a Fidelity Private Client rep who had me using RIP. Then, about a year before ER, I found this forum and FIRECalc... and later, i-ORP as well. I started getting comfortable with my decision when all these tools were providing more-or-less the same conclusion. After 4 years, and a favorable market, I don't really check much anymore, except updating my own spreadsheets a few times per year. Our WR is less than the portfolio dividend rate and we still have SS coming at some point. Need to work on spending more...
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Old 10-08-2017, 08:57 AM   #14
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Quote:
Originally Posted by Ready View Post
I find FIRECalc useful for looking at past historical returns, but I don't completely trust it for predicting my "safe" withdrawal rates. The numbers I come up with, even testing for 100% success, just seem too good to be true. Maybe I'm just overly conservative, but I would not feel comfortable spending the number Firecalc tells me I can spend at 100% success.
+1

FC gives me a 100% SWR that equates to more than double what I'm currently spending, and this is without including SS, likely inheritance, or any drop-off in spending after age 56. Obviously this is very gratifying and is a good validation of my choice to go semi-ER several years ago in my mid 40s. But I don't fully trust the fairly eye-popping numbers that FC spits out, so I tend to think of my "real world" SWR as roughly ⅔ - what FC says it could be.
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Old 10-08-2017, 09:18 AM   #15
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I have always been a numbers guy and enjoy data analysis. I guess that comes from my previous life as an engineer. FireCalc, Fidelity RIP, Flexible RP and Lifetime Planner (Quicken/MS) are my main tools in my toolbox. None of them are the "perfect" retirement tool but for me using them together give me the information I need to make decisions as we go down our 44 year retirement plan. I run different "what if" scenarios on all tools against my risk mitigation plans to see how my plan holds up over the 44 years. Healthcare, Inflation and Taxes are my biggest concerns when running these tools. I'm a self proclaimed over-planner and I know I really do not have to do this level of analysis but it does seem to make me sleep better at night.
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Old 10-08-2017, 09:24 AM   #16
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Quote:
Originally Posted by Car-Guy View Post
To me it's just another retirement calculator, albeit one of the better ones IMO. I built my own detailed spreadsheets before I retired, which I felt comfortable with and just used FireCalc as a validation tool. Now that I'm retired, I don't use any of these tools except a very simple spreadsheet that tracks my NW from year to year.
+1, except that I still run FIRECalc now and then (after 8 years of retirement), just for fun. I don't spend anywhere near what it tells me I can spend, because I am very cautious. Also I really don't need to spend that much for the lifestyle to which I am accustomed. But (to me) it is fun to see FIRECalc's output telling me that I could spend so extravagantly, and still not run out of money.
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Old 10-08-2017, 09:34 AM   #17
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Quote:
Originally Posted by Car-Guy View Post
To me it's just another retirement calculator, albeit one of the better ones IMO. I built my own detailed spreadsheets before I retired, which I felt comfortable with and just used FireCalc as a validation tool. Now that I'm retired, I don't use any of these tools except a very simple spreadsheet that tracks my NW from year to year.
+1
My spreadsheet is a sanity check to be sure I count all my assets once per year to have a nice overview with a pretty chart
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Old 10-08-2017, 09:37 AM   #18
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I like that FC shows a huge range of outcomes for the same spending. It reminds me that life is full of unexpected events. Surely, one should plan, but be ready to adapt and change if things don't work out as planned.

My situation is that FC shows that I do not have to worry about money. That allows me more time to worry about my health.
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Old 10-08-2017, 10:17 AM   #19
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I build my own spreadsheet. I know what is my assumption. I test various strategies based on today's tax code.

It is kind of fun.
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Old 10-08-2017, 10:43 AM   #20
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Quote:
Originally Posted by bradaz2488 View Post
I have always been a numbers guy and enjoy data analysis. I guess that comes from my previous life as an engineer. FireCalc, Fidelity RIP, Flexible RP and Lifetime Planner (Quicken/MS) are my main tools in my toolbox. None of them are the "perfect" retirement tool but for me using them together give me the information I need to make decisions as we go down our 44 year retirement plan. I run different "what if" scenarios on all tools against my risk mitigation plans to see how my plan holds up over the 44 years. Healthcare, Inflation and Taxes are my biggest concerns when running these tools. I'm a self proclaimed over-planner and I know I really do not have to do this level of analysis but it does seem to make me sleep better at night.


+1

I did all those plus many more and then did my own spreadsheets. You could say I was obsessed trying to prove to myself that I could retire early. Now I've actually stopped reviewing those and only adjust net worth quarterly as to estimate next year's withdrawals.
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