I believe that most (all?) calculators assume income first and then w/d from one's own retirement investments to provide one's retirement expenses. If somebody can live on income alone, be it SS, or pension, or any other source outside of their own investments, then the investments will not be tapped and go to zero unless there is a worldwide financial collapse.
Well yes.
In G Man's thought process, by default the investments are being used to cover some of the expenses. So if they go to zero, conceptually if one were still to have a successful remaining years of retirement, one would then need to cut their expenses down to just the income stream available.
This may open up a can of worms, but it’s something I noticed this morning after doing a proforma tax return for 2023. The planner estimates your taxes. It’s not called out, but it is the difference between your budgeted expenses and income withdrawn from the account. Fidelity had mine at over $10,000 owed in taxes and my actual taxes will be about $4500. So as many have said before about the tool, it leans conservative. You likely are in better shape than it shows.
COcheesehead said:This may open up a can of worms, but it’s something I noticed this morning after doing a proforma tax return for 2023. The planner estimates your taxes.
It’s not called out, but it is the difference between your budgeted expenses and income withdrawn from the account. Fidelity had mine at over $10,000 owed in taxes and my actual taxes will be about $4500. So as many have said before about the tool, it leans conservative. You likely are in better shape than it shows.
This may open up a can of worms, but it’s something I noticed this morning after doing a proforma tax return for 2023. The planner estimates your taxes. It’s not called out, but it is the difference between your budgeted expenses and income withdrawn from the account. Fidelity had mine at over $10,000 owed in taxes and my actual taxes will be about $4500. So as many have said before about the tool, it leans conservative. You likely are in better shape than it shows.
Some what are the columns in the tabular format that is being used to calculate the taxes?
Take the total expense column and subtract the retirement expense total you entered into the budget area. The difference is what Fidelity calculates as your taxes. Your retirement expenses should not include taxes because the tool estimates (over estimates for me) the tax.
This is a very informative thread. I've got a couple of brokerage accounts with Fidelity and my employer also uses them to manage/deposit RSU's, so Fidelity advisors have been calling me from time to time to sign me up for their Private Client Group. I finally took the bait and had an intro call, which went well, so will definitely consider. Anyhow, they pointed out the analysis tool, so I went in and populated it. It's a bit clunky, but once you get the hang of it has proven a valuable addition to my slate of financial tools. More importantly, if I do decide go with a Fidelity advisor and consolidate my portfolio with them, this will be an important means of analysis between us.
Should add, most importantly, FWIW, its giving me the thumbs up on FIRE even in the most severe market case! Biggest "complaint" is that wish it would show more of the behind the scenes calculations (taxes, yields, failure rates, etc.).
Should add, most importantly, FWIW, its giving me the thumbs up on FIRE even in the most severe market case! Biggest "complaint" is that wish it would provide the option of showing more of the detail of the behind the scenes calculations (taxes, yields, failure rates, etc.).
Keep in mind that the most severe case is equal to success in 90% of the scenarios. This concept in the default success rate of Firecalc is 95%.
It is reasonably comparable, as the Fidelity methodology uses a Monte Carlo simulation which is inherently more conservative than a historical sequential model used in Firecalc. Plus there is a first year haircut taken in Fidelity.
Thanks - took me awhile playing with it and some reading thru this thread and the PDF that G-Man recommended to figure out some of the peculiarities of this model, especially the upfront haircut part. Kept messing with it trying to understand where the rest of my portfolio went. Well, seems that SORR took a big bite out of it! Thanks for confirming!
Fidelity’s tool does a good job of telling you if you have enough to retire, but it does not do a good job of figuring taxes - especially if you are doing Roth IRA conversions.
https://myguidance.fidelity.com/ftgw/pna/customer/planning/goals/retirementFor some reason this morning, I no longer see a link to the Fidelity Retirement planner tool when I log into my Fidelity account. Are others having the same issue?
If someone has the direct link to the tool, can you please post it.
Thanks
https://myguidance.fidelity.com/ftgw/pna/customer/planning/goals/retirement
I can still navigate there by going to Planning & Advice, My Goals, then scroll down and click View Details under your Retirement goal, but it took me a while to figure that out, for weeks I've been getting there by typing "retirement" in the address bar and it populated it from my browser history.
I don't know why they're hiding it, the retirement budget tool is one of the most useful things on the site.
I opened portfolio, summary and on right hand side I see a link to "Review your Plan"
Direct link to tool as requested: https://myguidance.fidelity.com/ftgw/pna/customer/planning/goals/retirement
This is what I see when I go to My Goals. I've highlighted the "View Details" link that I can use, although I also have the URL I gave bookmarked.Not seeing the View Details under Retirement goal. Can you post a screenshot. I'm seeing a different screen.
I see a "View Details" under my Net Worth. When I click on View Details, it takes me to the Fidelity Full View planning tool. Not the other planning tool when it gives you a score, etc.
This is what I see when I go to My Goals. I've highlighted the "View Details" link that I can use, although I also have the URL I gave bookmarked.