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Redefining "Failure"
Old 08-23-2006, 11:07 AM   #1
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Redefining "Failure"

I am not experienced with FireCalc so this may be a dumb question.* Can the floor be redefined, such that a "failure" might be for example a decline to 1/2 the starting portfolio value?

I ran the defaults: $750,000 portfolio, $30,000 pa withdrawal, etc. It says "6 failures" for a success rate of 94.3%, or conversely a failure rate of 5.7%.

But I think I would not be happy with missing a tap-out by a few bucks. Also, I am puzzled by this:
Quote:
And here is how your portfolio would have ended up in each of the 106 cycles. The range was $-300,739 to $4,259,606, with an average of $1,284,723. (Note: values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
How did I get to (-$300,739) on the least successful path?

Does this mean that I had some non-zero amount at the start of the failure year, and suffered a catastrophic loss in that year?

Also, I am puzzled by this statement
Quote:
(Note: values are in terms of the dollars as of the beginning of the retirement period for each cycle.)
Does this mean That all ouputs that are money amounts are expressed at the same index value as the starting portfolio and the starting withdrawal? So that if I were to run the default today, I would assume that all money outputs are in today's dollar?


Thanks for any help.

Ha
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Re: Redefining "Failure"
Old 08-23-2006, 12:23 PM   #2
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Re: Redefining "Failure"

Is Ha preparing to spend a bit more in retirement!?

Quote:
Can the floor be redefined, such that a "failure" might be for example a decline to 1/2 the starting portfolio value?
Go to the Options tab, and you'll find an option for minimum terminal value.

Quote:
How did I get to (-$300,739) on the least successful path?

Does this mean that I had some non-zero amount at the start of the failure year, and suffered a catastrophic loss in that year?
FC just keeps subtracting the withdrawal amount from your balance even once it goes negative.* *You can see the annual interim results by checking a box on the Results options.* *Some of the failure sequences went increasingly more negative for 7 years.

Quote:
Does this mean that all ouputs that are money amounts are expressed at the same index value as the starting portfolio and the starting withdrawal?
Yes.* The intent is to show the results in terms of your original purchasing power, so Dory subtracts the inflation adjustment for each displayed amount.


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Re: Redefining "Failure"
Old 08-23-2006, 02:52 PM   #3
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Re: Redefining "Failure"

Quote:
Originally Posted by wab
Is Ha preparing to spend a bit more in retirement!?
Who knows? Not likely, but it could happen.*

Thanks for the instructions.

Ha
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