I've got a long time before retirement, 20 years according to current plan.
When I run firecalc it generally says my plan is good, as does the other popular historical backtesting calculator that shall not be named (the Voldemort calculator?). However when I run things in Fidelity RIP I get a much more pessimistic outlook. For example firecalc says I can spend 120k a year upon retiring with my current plan with 100% success. FRIP says "You may have 71k a year".
I'm wondering if others have seen similar results with RIP being more pessimistic or not. I know RIP uses Monte Carlo simulation, (which I don't like as much) and wonder if perhaps this particularly long time frame of savings before retirement somehow makes this outlook more pessimistic.
I looked at the methodology of RIP but wasn't 100% clear on the logic they use. I'm not sure if the simply roll the dice for each subsequent year of the simulation run, and thus sometimes get a ton of very negative return years in the simulation, or of they also do some kind of analysis of the previously rolled numbers and make it less likely to roll more bad years if all recent past ones have been bad too, and thus avoid simulating a whole decade of negative returns for example.
When I run firecalc it generally says my plan is good, as does the other popular historical backtesting calculator that shall not be named (the Voldemort calculator?). However when I run things in Fidelity RIP I get a much more pessimistic outlook. For example firecalc says I can spend 120k a year upon retiring with my current plan with 100% success. FRIP says "You may have 71k a year".
I'm wondering if others have seen similar results with RIP being more pessimistic or not. I know RIP uses Monte Carlo simulation, (which I don't like as much) and wonder if perhaps this particularly long time frame of savings before retirement somehow makes this outlook more pessimistic.
I looked at the methodology of RIP but wasn't 100% clear on the logic they use. I'm not sure if the simply roll the dice for each subsequent year of the simulation run, and thus sometimes get a ton of very negative return years in the simulation, or of they also do some kind of analysis of the previously rolled numbers and make it less likely to roll more bad years if all recent past ones have been bad too, and thus avoid simulating a whole decade of negative returns for example.