when income = spending, portfolio fails

[Bongleur]

$70,000 income inflation adjusted (SS + pension) $70,000 spending zero portfolio: > Here is how your portfolio would have fared in each of the 51 cycles. The lowest and highest portfolio balance at the end of your retirement was $-7,010,292 to $0, with an average at the end of $-5,005,726. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.) For our purposes, failure means the portfolio was depleted before the end of the 40 years. FIRECalc found that 51 cycles failed, for a success rate of 0.0%. >

[Mdlerth]

Are you certain you selected "Pension Income" instead of "Off-Chart Spending"?

[Bongleur]

Quote:

Originally Posted by Mdlerth Are you certain you selected "Pension Income" instead of "Off-Chart Spending"?

Yes. I selected "Pension income" & it shows as a negative on the detail chart as "other withdrawal change" which is an odd phrase, although a negative "change" is "more income": Input Data for this model Withdrawals 70,000 Plan End 40 95% Rule from WorkLess, Live More* Percentage used for 95% Rule* 0 Bernicke Spending Reductions* Current Age (for scheduling Bernicke spending reductions)* 48 Starting Portfolio 0 Percent in Stocks 40% Expense Ratio 0.18% Retirement Year* 2019 Contributions until then* 0 Social Security* 15,000 Starting in* 2029 Spouse Social Security* 15,000 Starting in* 2026 Other withdrawal change* -30,000 Starting in* 2018 Inflation adjusted* yes Other withdrawal change* -10,000 Starting in* 2018 Inflation adjusted* yes Other withdrawal change* +0 Starting in* 2028 Inflation adjusted* yes Lump sum change to portfolio* +0 In year 2022 Lump sum change to portfolio* +0 In year * 2032 Lump sum change to portfolio* +0 In year * 2037 Inflation Rate selected* CPI Fixed income model * T5 Override start year* 1928 Terminal Value* 0 US Micro Cap** 10 US Small** 10 US Small Value** 10 S&P 500** 40 US Large Value** 40 US LT Treasury** 10 LT Corporate Bond** 15 1 Month Treasury** 5

[Bongleur]

I just did it again as simply as possible: 1) SS 70k starting now 2) zero portfolio 3) 40 years. I think maybe its not adjusting SS for COLA But even so, it should not show a negative balance in Year 1. ... Here is how your portfolio would have fared in each of the 51 cycles. The lowest and highest portfolio balance at the end of your retirement was $-10,107,524 to $0, with an average at the end of $-7,011,386.

[Bongleur]

Income minus Spending = Zero portfolio change. Portfolio value = Zero; therefore none of the choices in "Your Portfolio" (should) make any difference. The chart line should be horizontal at the "start value" which is zero. All lines must be the same, so just a single line.

[Bongleur]

Is there NO WAY to make this input box show blank lines, so what I write isn't a run-on mass of words ??

[ChiliPepr]

Quote:

Originally Posted by Bongleur I just did it again as simply as possible: 1) SS 70k starting now 2) zero portfolio 3) 40 years. I think maybe its not adjusting SS for COLA But even so, it should not show a negative balance in Year 1. ... Here is how your portfolio would have fared in each of the 51 cycles. The lowest and highest portfolio balance at the end of your retirement was $-10,107,524 to $0, with an average at the end of $-7,011,386.

I get these results when "off chart spending" is checked, but a flat line 0 when "pension income" is checked.

[Bongleur]

Still wrong output with "A portfolio with consistent growth of 2.2%, and an inflation rate of 2.2%." -- shows a straight line decline instead of a horizontal line.

[dtbach]

?? I'm not following this at all. Am I missing a chart or something?

[Bongleur]

Quote:

Originally Posted by dtbach ?? I'm not following this at all. Am I missing a chart or something?

Enter any figure you want for SPENDING...................................... Enter the same figure for Social Security...................................... Both starting now in 2018...................................... Enter ZERO for portfolio value...................................... ...................................... This should succeed 100% of the time, no matter what is entered in the "Your Portfolio" tab, because the portfolio is ZERO and income exactly equals expenses, forever, because SS is COLA.

[COcheesehead]

I see what the OP is talking about. If your income SS and pension equal your spending. Firecalc chokes on it and shows you diving into retirement hell.

[skipro33]

****EDIT****
I found your problem;

Quote:

Both starting now in 2018.

You are using LAST year, 2018. Change 2018 to 2019 and it works as expected. I tried both and 2018 fails. I found that any previous year fails. Evidently firecalc is a prediction of future, not past performance, so it dumps the income as a non-amount.

Just disregard the rest of this post. I wrote it prior to the above mentioned test.

Are you SURE you are entering the full year's worth of SS? For example; spending $24,000 a year, zero portfolio, $24,000 for SS.

It's easy to accidently put in the MONTH value for SS instead of the YEAR's value of SS. I put in $24K spending, zero portfolio and $24K a YEAR SS and the chart showed zilch. The account balance says;

Quote:

Here is how your portfolio would have fared in each of the 118 cycles. The lowest and highest portfolio balance at the end of your retirement was $0 to $0, with an average at the end of $0. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

[Dtail]

Quote:

Originally Posted by skipro33 Are you SURE you are entering the full year's worth of SS? For example; spending $24,000 a year, zero portfolio, $24,000 for SS. It's easy to accidently put in the MONTH value for SS instead of the YEAR's value of SS. I put in $24K spending, zero portfolio and $24K a YEAR SS and the chart showed zilch. The account balance says;

Same result for me.

[ERD50]

A zero portfolio is a failure. Simple as that.

Even with a small portfolio, you'd need to look at the exact timing of the income and spend. IIRC they are both at the start of the year, so should null out (but check that). But that still leaves zero portfolio, and that's a failure.

Edit:

Nope, I entered $0 portfolio, $10,000 spend, $10,000 inflation adj income, 2019. 100% success, $0 all the way. So I guess 'depleted' means < 0, not 0.

Quote:

FIRECalc looked at the 118 possible 30 year periods in the available data, starting with a portfolio of $0 and spending your specified amounts each year thereafter. Here is how your portfolio would have fared in each of the 118 cycles. The lowest and highest portfolio balance at the end of your retirement was $0 to $0, with an average at the end of $0. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.) For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 0 cycles failed, for a success rate of 100.0%.

https://goo.gl/x127Mz << link to data, you need to do this so people can check your work

2nd edit: As skippro pointed out - 2019.



-ERD50

[Bongleur]

Quote:

Originally Posted by skipro33 ****EDIT**** I found your problem; You are using LAST year, 2018. Change 2018 to 2019 and it works as expected. I tried both and 2018 fails. I found that any previous year fails. Evidently firecalc is a prediction of future, not past performance, so it dumps the income as a non-amount.

Looking better now, thanks. Just getting back to this...

[Bongleur]

Just got a weird result, after a calc window got sent to PHP/SWF Charts > Introduction

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