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Question Re How My Portfolio is Invested in FireCalc
Old 11-15-2010, 11:10 AM   #1
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Question Re How My Portfolio is Invested in FireCalc


I have a question regarding FireCalc. In FireCalc 3.0 my question arises under the "Your Portfolio" tab. In Advanced FireCalc, my question arises under "How is it Invested?" tab.

I choose for FireCalc's calculations to be based on a portfolio invested in total market, split between equities and fixed income and that the percentage of my portfolio that is in equities is 80%.

Now, the 80% is what is true today. I may not be able to retire for another 5 to 15 years. As time advances, I will reduce the percentage of my portfolio that is in equities.

Does FireCalc "factor in" a reduced future equity percentage of portfolio when it provides results of success of retiring by a certain date based on my spending level, current net worth, and estimate annual savings?

If FireCalc does not factor in a decreasing percentage of equities in my portfolio as time advances, is there some other way that I can factor that in?

Thank you for your advice.

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Old 11-15-2010, 02:21 PM   #2
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Midnighter, I'm not aware of any feature in FIRECalc to change your asset allocation (decrease your equity percentage) at a point in the future and have it included in your calculations.

Perhaps others will chime in with ideas on how you might factor in a AA change, I'm not aware of any way to do so.

Numbers is hard.

Retired in 2005 at age 58, no pension

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Old 11-15-2010, 02:38 PM   #3
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Me neither. I think probably the best way of modeling it would be to average your current AA and your retirement AA. So if it is 80/20 now and 50/50 in retirement you have about 1/3 of the time at 80/20 and 2/3 at 50/50 your average is 60/40.

One word of caution don't be to hung up on being exact. No point in measuring with a micrometer when cutting with an axe.
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