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Old 11-14-2017, 10:44 AM   #41
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Originally Posted by Midpack View Post
You keep trying to suggest FIRECALC is something it explicitly claims it’s not on page one of the documentation.
I've done no such thing. My point was simply this: Firecalc prints out, as a one-number takeaway, the percentage success rate. People use this to infer what their probability of success will be. But the conditional probability of success (the statistic that is used when we know something about the current conditions) is different from what FC prints out, and my contention is that under current economic conditions, your conditional probability of success is probably less than what FC is showing as a success rate.

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Curmudgeon: Asked in post #6 above but again, what methodology do you recommend and use to plan for retirement spending? If you think FIRECALC is “optimistic” and “worthless,” surely you have a better approach for us.
I use FireCalc and iORP, mainly. But, as I said, I don't think the percentage success rate is one that people should infer applies today.
And I never said FC is "Worthless", so I'll thank you not to misquote me. What I said was that the "absolute information" - a term someone else used, and which I think was meant to indicate that FC is only meant to predict past results, and should not be used to infer future performance - is worthless to me. Because I don't care whether someone who retired in 1917 was successful or not. I care about the PROBABILITY that MY retirement, which began in 2016, will be successful.

You guys seem so insistent on harping that "you're using it wrong!!!" that I think you're missing my point. So, I'm done here - this is getting too much like wrestling a pig, and the pigs are having more fun than I am.
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Old 11-14-2017, 11:15 AM   #42
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I've tried every financial calculator that I find. I don't fully trust or rely upon any.

I had two larger concerns. Are they potentially biased, making assumptions allowing fund families post rosier projections. This subtly entices people to invest with them. Sales data is cherry picked, why not calculators?

Limited data on my choices of investments means that I can only make wild guesses for the assumptions made by that calculator. I keep a larger fraction of my portfolio in foreign funds. World wealth is proportionally higher, which affects geographic bias risks. Data however is sparse.

Our final choice was to deliberately err in the conservative side by 2X. This meant putting pulling the plug came later, but has a safety factor built in. 2X sounds like a lot, but in a few years of good returns, our investments and contributions compounded and doubled our investment.

edit add: The calculators now seem better than I feared. fireCalc has one easy to use feature in choosing different variable withdrawal methods. I really liked that feature.
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Old 11-14-2017, 01:44 PM   #43
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Originally Posted by Curmudgeon View Post
I've done no such thing. My point was simply this: Firecalc prints out, as a one-number takeaway, the percentage success rate. People use this to infer what their probability of success will be. But the conditional probability of success (the statistic that is used when we know something about the current conditions) is different from what FC prints out, and my contention is that under current economic conditions, your conditional probability of success is probably less than what FC is showing as a success rate.



I use FireCalc and iORP, mainly. But, as I said, I don't think the percentage success rate is one that people should infer applies today.
And I never said FC is "Worthless", so I'll thank you not to misquote me. What I said was that the "absolute information" - a term someone else used, and which I think was meant to indicate that FC is only meant to predict past results, and should not be used to infer future performance - is worthless to me. Because I don't care whether someone who retired in 1917 was successful or not. I care about the PROBABILITY that MY retirement, which began in 2016, will be successful.

You guys seem so insistent on harping that "you're using it wrong!!!" that I think you're missing my point. So, I'm done here - this is getting too much like wrestling a pig, and the pigs are having more fun than I am.
I get your point.

I'm surprised you haven't been labeled a "market timer" yet in these replies.
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Old 11-14-2017, 02:06 PM   #44
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Originally Posted by Curmudgeon View Post
But the conditional probability of success (the statistic that is used when we know something about the current conditions) is different from what FC prints out, and my contention is that under current economic conditions, your conditional probability of success is probably less than what FC is showing as a success rate.
If you look at MC papers that try to model the impact of current conditions (i.e. US market PE and bond yields), I think to maintain the same 5% failure rate, you need to drop the withdrawal rate by maybe 0.5 - 1%. I don't remember the exact number and of course it depends on the specific study.
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Old 11-14-2017, 02:37 PM   #45
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Originally Posted by devans0 View Post
I've tried every financial calculator that I find. I don't fully trust or rely upon any.

I had two larger concerns. Are they potentially biased, making assumptions allowing fund families post rosier projections. This subtly entices people to invest with them. Sales data is cherry picked, why not calculators?
I don't think so. I haven't used them all, obviously, but the big name ones (Firecalc, I-orp, Fidelity, etc.) don't ask what your investments are in, they just ask percentage of asset allocation. If you aren't specifying what funds/stocks/whatever you are investing in, there's no option to cherry pick results to steer you toward particular investments.
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Old 11-14-2017, 03:44 PM   #46
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Originally Posted by audreyh1 View Post
It is not a Monte Carlo simulator. It doesn't do any kind of random stuff.
I think it does if you select the last option on the Your Portfolio tab.
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A portfolio with random performance, with a mean total portfolio return of 10% and variability (standard deviation) of 10%. Assume an inflation rate of 3.00%.
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I always considered Firecalc as a “backcaster” and used it along with 2 “forecaster” tools, one from Financial Engines and one from Fidelity to help make my decision on when to retire. The forecaster tools I ran used Monte Carlo simulation to generate random data looking forward while Firecalc used historical data to see how I would have fared in the past.

Only 7 years into retirement but so far so good and this year we are both now eligible for SS so have extra income streams available.
+1 assuming the default option under Firecalc.
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Old 11-14-2017, 03:48 PM   #47
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I do like Firecalc, but I wish it included a few more asset types that it doesn't currently have. There are sources for them pretty far back in time which are now used for the updated Simba's spreadsheet over at bogleheads.
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Old 11-14-2017, 04:08 PM   #48
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Originally Posted by big-papa View Post
I do like Firecalc, but I wish it included a few more asset types that it doesn't currently have. There are sources for them pretty far back in time which are now used for the updated Simba's spreadsheet over at bogleheads.
Sadly FC has more potential then it currently provides. It badly needs an update, especially in the area of output summary.
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Old 11-14-2017, 08:08 PM   #49
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Originally Posted by Curmudgeon View Post
My point was simply this: Firecalc prints out, as a one-number takeaway, the percentage success rate. People use this to infer what their probability of success will be. But the conditional probability of success (the statistic that is used when we know something about the current conditions) is different from what FC prints out, and my contention is that under current economic conditions, your conditional probability of success is probably less than what FC is showing as a success rate.
All models are wrong; some models are useful. FIRECalc is a model like any other. At the end of the day, you roll the dice and take your chances.
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Old 11-15-2017, 10:06 AM   #50
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I ran/run Firecalc along with a Montecarlo simulator. They are both tools that help me make a better decision. Not a perfect decision, but a better one.

Want certainty? Wait until I get the part I need to repair my Time Machine. That will be a bit of a wait since temporal matrix de-morgrifiers weren't even invented until 2132. Then we can zoom through the years and see exactly what will happen from 2017 on.
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Old 11-15-2017, 11:58 AM   #51
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+1 vote for cfiresim listed on darrow's list. I like the spending models available and the output analysis including averages and medians.
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Old 11-15-2017, 12:20 PM   #52
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^ Knowing the history of how it was created, wouldn't trust any output from that calculator.
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Old 11-15-2017, 12:22 PM   #53
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Originally Posted by Curmudgeon View Post

I'm guessing that the conditional probability here is significantly lower than what FIRECalc is giving.

Only if your personal forecast of future investment returns + inflation rates is more pessimistic than the worst period FireCalc takes into consideration would this be true.

If your think the future years when you'll be retired will be worse than the worst period FireCalc used then, of course, you'll be correct.
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Old 11-15-2017, 12:29 PM   #54
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+1 vote for cfiresim listed on darrow's list. I like the spending models available and the output analysis including averages and medians.
Haven't looked at this in quite awhile. It appears to be a very nice simulator and one can look at individual portfolio paths easily.

I like VPW partly because I can look under the hood and play with in on my computer.
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Old 11-15-2017, 12:42 PM   #55
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FIRE'd for 11+ years, I've found FireCalc to be spot on. My outcome so far is well within the upper and lower boundaries of historical performance FireCalc calculated when I pulled the plug in 2006. At that time, I was using 30 year runs so, of course, only time will tell if I remain "inbounds."

Admittedly, my investment parameters and spending have not exactly followed the numbers I originally entered into FireCalc. I doubt if anyone's do.......
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Old 11-16-2017, 07:28 PM   #56
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firecalc is my favorite of the calculators. I've run pretty much all of them. Running different calculators helps you firm up your plan. For example:
- Firecalc is probably the easiest for playing around with when to take SS, and what the impact of different asset allocations will be.
- Fidelity RIP was great at helping flesh out spending and let one have different inflation rates for different budget line items - so I was able to play around with likely higher inflation rates for healthcare and college expenses (I still have kids under roof) to better match the current reality.
- i-Orp is great for ideas on which account to withdraw from for optimal spending/reduced taxes... and strategies for roth conversion.
- Quicken lifetime planner is great for modeling one time expenses or inflows of money... and also good for the college expense modeling. It's deterministic.

running each of these calculators helped me think about my retirement planning in different ways - raising different questions, drilling down in different areas. I didn't pull the plug until I had confident results in *all* of the calculators. I'm glad I went through the exercise.

Now I run firecalc once a year or so... same with fidelity retirement income planner. I check quicken a bit more frequently because I've already got the data loaded in quicken and can quickly 'what if' different scenarios.

As for what the future will hold and whether firecalc is too optimistic... I certainly don't know... But I know I can adapt, cut spending, downsize, etc... if the future turns icky. Since none of us know the future, we all have to be adaptable.
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Old 11-18-2017, 05:27 PM   #57
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Originally Posted by rodi View Post
firecalc is my favorite of the calculators. I've run pretty much all of them. Running different calculators helps you firm up your plan. For example:
- Firecalc is probably the easiest for playing around with when to take SS, and what the impact of different asset allocations will be.
- Fidelity RIP was great at helping flesh out spending and let one have different inflation rates for different budget line items - so I was able to play around with likely higher inflation rates for healthcare and college expenses (I still have kids under roof) to better match the current reality.
- i-Orp is great for ideas on which account to withdraw from for optimal spending/reduced taxes... and strategies for roth conversion.
- Quicken lifetime planner is great for modeling one time expenses or inflows of money... and also good for the college expense modeling. It's deterministic.

running each of these calculators helped me think about my retirement planning in different ways - raising different questions, drilling down in different areas. I didn't pull the plug until I had confident results in *all* of the calculators. I'm glad I went through the exercise.

Now I run firecalc once a year or so... same with fidelity retirement income planner. I check quicken a bit more frequently because I've already got the data loaded in quicken and can quickly 'what if' different scenarios.

As for what the future will hold and whether firecalc is too optimistic... I certainly don't know... But I know I can adapt, cut spending, downsize, etc... if the future turns icky. Since none of us know the future, we all have to be adaptable.
+1

Use these 3 for the same reasons.
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Old 11-19-2017, 07:58 AM   #58
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I like the Monte Carlo simulation that Schwab and others use. It quickly allows me to try different withdrawal rates and growth rates to see how my money holds up against different scenarios with constant death date.
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Old 11-22-2017, 10:05 AM   #59
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^ Knowing the history of how it was created, wouldn't trust any output from that calculator.

Can you elaborate? What's the story here?
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Old 11-22-2017, 10:20 AM   #60
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A forum search on the calculator should find several discussions on the deception involved in developing it. Note that multiple accounts using different user names were deleted so you won't be able to see that part of the story.
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