Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Midpack's FIRECalc post 59988
Old 10-25-2013, 12:10 PM   #1
Dryer sheet aficionado
 
Join Date: Dec 2010
Posts: 28
Midpack's FIRECalc post 59988

Quote:
Originally Posted by Midpack View Post
...At any rate, I used your consistent market growth 0% market growth -0% fixed income -3% inflation scenario and the 100% success threshold 30 year withdrawal rate was 1.98%. This literally models putting your money under your mattress in a 3% inflation environment! IMO, the consistent market growth option shouldn't be used to model any real world scenario except under the mattress...

...If you actually plan to invest in equities and fixed income but you want to model a net 0% return to be "most conservative/cautious", I think you'd have to select the fourth Your Portfolio option, random performance, and enter 0% portfolio return, 10% standard deviation (default, unless you believe otherwise) and 3% inflation. That results a 100% success threshold 30 year withdrawal rate of about 0.9%!...



Anyone know how to have Firecalc display withdrawal rates?
I found this older post (59988) today while researching the same question as the original OP. In part of Midpack's reply she showed a withdrawal rate from Firecalc. (see above)
Anyone know how Midpack was able to get Firecalc to display withdrawal rates ?
__________________

__________________
Steven is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-25-2013, 03:26 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,968
Jeez, I guess I should reply to this thread given the subject...

Check out the Investigate Tab, specifically as shown in the attachment below.

You enter spending, portfolio and years on the first (Start Here) page. When you choose "Spending Level" (see red arrow) on the Investigate page, FIRECALC will use your portfolio and years inputs and ignore your spending input. That investigate option calculates (first year) spending for you and returns an answer in $ and as a withdrawal rate. That's all I did...

The Investigate page is very useful IMO.

And Midpack is a "he" - avatar notwithstanding (just someone I admire).
Quote:
Originally Posted by Midpack View Post
Well, I had never played with the consistent market growth option, but now I realize what it is. It's literally a fixed rate of return, in your scenario, a 0% return on equity and fixed income and 3% inflation - year in and year out. And that's why there is only one line on the results chart, even if you enter some positive return. Unless you're literally putting your money under a mattress, I don't believe there are any real (30 year) fixed rate of return investments. Even if equity and fixed income returns 0% overall, they will flucuate from year to year.

At any rate, I used your consistent market growth 0% market growth -0% fixed income -3% inflation scenario and the 100% success threshold 30 year withdrawal rate was 1.98%. This literally models putting your money under your mattress in a 3% inflation environment! IMO, the consistent market growth option shouldn't be used to model any real world scenario except under the mattress.

If you actually plan to invest in equities and fixed income but you want to model a net 0% return to be "most conservative/cautious", I think you'd have to select the fourth Your Portfolio option, random performance, and enter 0% portfolio return, 10% standard deviation (default, unless you believe otherwise) and 3% inflation. That results a 100% success threshold 30 year withdrawal rate of about 0.9%! OUCH!

I hadn't thought about it, but that says if you expect a 0% distribution portfolio return, you are indeed better off putting your money under your mattress instead of investing at all (based on 100% success WR's).

However, in your example you also have an appreciating asset in Soc Security which will improve your WR result.

And if we have 0% portfolio returns and 3% inflation for 30 years, we are all in big trouble...
Attached Images
File Type: jpg WRInvestigate.jpg (139.7 KB, 37 views)
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-26-2013, 07:59 AM   #3
Dryer sheet aficionado
 
Join Date: Dec 2010
Posts: 28
Midpack - Thank you for your extremely helpful reply . My apologies for refering to you as a she.
__________________
Steven is offline   Reply With Quote
Old 10-26-2013, 08:53 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,968
Quote:
Originally Posted by Steven View Post
Midpack - Thank you for your extremely helpful reply . My apologies for refering to you as a she.
No apology necessary, perfectly understandable given my avatar...there are several confusing avatars here.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-26-2013, 08:58 AM   #5
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,424
Quote:
Originally Posted by Midpack View Post
...there are several confusing avatars here.
That's why I went with a self-portrait instead...
__________________
MichaelB is offline   Reply With Quote
Old 10-26-2013, 09:47 AM   #6
Dryer sheet aficionado
 
Join Date: Dec 2010
Posts: 28
I need an avatar but can't find a pic of a "dryer sheet wannabe".
__________________
Steven is offline   Reply With Quote
Old 10-26-2013, 11:22 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 5,676
I'm wondering about that Spending Level selection.

RUN #1 I got a 100% success rate "Percentage of Remaining Portfolio" selected on the Spending Models tab and "Display the results of the retirement plan" selected on the Investigate tab. Good so far and even better is the fact that the portfolio never dips into very low levels in all 69 of the 20 year runs.

RUN #2 I just change the Investigate tab to "Spending Level" and for the same initial spending level ( I see a 3 failures out of 69 periods. This looks very different the RUN #1 and is a troubling result.

I changed the Spending Model to CPI adjusted:
RUN #3 Same as RUN #1 but with CPI adjusted spending. Got 100% success but minimum portfolio values went lower, as expected.

Next I decide to use RUN #2 and keep the change I made in RUN #3.
RUN #4 Same as RUN #3 but select "Spending Level" results. Now I get excellent results. No failures and high spending levels allowed.

It looks like if you pick Spending Level for the results you better not have selected "Percentage of Remaining Portfolio". Seems to be a FIRECalc bug -- or is it operator error?

P.S. No I am not a Blue Rabbit.
__________________
Lsbcal is offline   Reply With Quote
Old 10-26-2013, 12:03 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Quote:
Originally Posted by Steven View Post
I need an avatar but can't find a pic of a "dryer sheet wannabe".
Heh..I did my best...
Attached Images
File Type: jpg Untitled.jpg (19.6 KB, 272 views)
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 10-26-2013, 01:09 PM   #9
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,085
Good thread, and I will move it to Firecalc Support which is where MidPack (before her sex change) had the post referenced here.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 10-26-2013, 03:59 PM   #10
Dryer sheet aficionado
 
Join Date: Dec 2010
Posts: 28
Quote:
Originally Posted by bbbamI View Post
Heh..I did my best...
Good one !
__________________
Steven is offline   Reply With Quote
Old 10-26-2013, 05:04 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,638
I always wondered about Midpack's avatar, I just learned to use Google's reverse image look-up so I gave that a shot -- now I know who she is. I guess it would have been easier to ask.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 10-26-2013, 07:49 PM   #12
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,085
Quote:
Originally Posted by donheff View Post
I always wondered about Midpack's avatar, I just learned to use Google's reverse image look-up so I gave that a shot -- now I know who she is. I guess it would have been easier to ask.
He's told us before who she is, but I forget....
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 10-26-2013, 07:55 PM   #13
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,511
I wasn't flying the airplane in my avatar but I did take the photo and have done the maneuver in that airplane. It's a Taylorcraft, built around 1946.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 10-27-2013, 07:21 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,968
Quote:
Originally Posted by Alan View Post
He's told us before who she is, but I forget....
What about Khan and all the other avatars that could be misleading? I didn't start the practice!
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-27-2013, 07:22 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,638
Quote:
Originally Posted by Midpack View Post
What about Khan and all the other avatars that could be misleading? I didn't start the practice!
I just thought some of you were Brits and like to dress up.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 10-27-2013, 10:03 AM   #16
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,085
Quote:
Originally Posted by donheff View Post
I just thought some of you were Brits and like to dress up.
I resemble that remark.
Attached Images
File Type: jpg image.jpg (119.3 KB, 13 views)
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 10-27-2013, 10:17 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,968
TMI

but funny...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-27-2013, 05:36 PM   #18
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,511
Quote:
Originally Posted by Alan View Post
I resemble that remark.
Double-dog dare ya!
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 10-27-2013, 09:11 PM   #19
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,085
Quote:
Originally Posted by Walt34 View Post
Double-dog dare ya!
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 10-28-2013, 09:37 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,410
Quote:
Originally Posted by Midpack View Post
What about Khan and all the other avatars that could be misleading? I didn't start the practice!
You mean that Khan is not Khan? But I digress....
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 07:51 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.