FIRE Day Model After 7.5 years

[joesxm3]

I got the idea to go dig out the spreadsheet I used to model retirement at the time that I stopped working and see what it said for 2023.

My assumptions were inflation 5% and investment return 4%. My assumption about the initial spending amount was about $10,000 more than I seem to have spent on average.

My end of 2023 total portfolio value is about 5% more than I had in the 2016 spreadsheet.

My average annual portfolio return (not accounting for compounding, but accounting for spending) is 4.3% from mid 2016 through 2023. That is compared to my initial 4% estimate. Not a very good return, but at least I was realistic about my individual situation.

Of course it is just one data point on a random time frame, but it seems to me to be pretty accurate for a simple back of the napkin spreadsheet.

Listening to the Boglehead Conference video today it seems I am following a strategy of having the lowest equity allocation at retirement and increasing over time. In my case, I have been spending cash from my taxable account and also trying to DCA into more equities.

So, the 2016 spreadsheet may not accurately model my situation going forward, but I was surprised to see that it tracked as well as it did for the past 7.5 years.

 

[Finance Dave]

Great results...maybe not the returns but the "nearness" to estimates. Nothing wrong with a low return, as that typically also means low volatility. You're far enough in now that you avoided/minimized the "big market drop during first years of FIRE" issue.

 

[ERD50]

.... My assumptions were inflation 5% and investment return 4%. ...

My end of 2023 total portfolio value is about 5% more than I had in the 2016 spreadsheet.

....I was surprised to see that it tracked as well as it did for the past 7.5 years.

But did you adjust your 2023 EOY portfolio for inflation? If you used an inflation adjustment in your spreadsheet, you'd need to discount your portfolio for actual inflation as well, right?

Matching the past 7.5 years is just a random thing. We could have had a big bull or bear in that time. It might be meaningful in 20 years or so, if history more/less repeats oveer the long run.

-ERD50

 

[street]

I got the idea to go dig out the spreadsheet I used to model retirement at the time that I stopped working and see what it said for 2023.

My assumptions were inflation 5% and investment return 4%. My assumption about the initial spending amount was about $10,000 more than I seem to have spent on average.

My end of 2023 total portfolio value is about 5% more than I had in the 2016 spreadsheet.

My average annual portfolio return (not accounting for compounding, but accounting for spending) is 4.3% from mid 2016 through 2023. That is compared to my initial 4% estimate. Not a very good return, but at least I was realistic about my individual situation.

Of course it is just one data point on a random time frame, but it seems to me to be pretty accurate for a simple back of the napkin spreadsheet.

Listening to the Boglehead Conference video today it seems I am following a strategy of having the lowest equity allocation at retirement and increasing over time. In my case, I have been spending cash from my taxable account and also trying to DCA into more equities.

So, the 2016 spreadsheet may not accurately model my situation going forward, but I was surprised to see that it tracked as well as it did for the past 7.5 years.

Interesting how comparably close you were with calculations. I also have been ER for 7.5 years and not having any projection data, I can say I would not have been as close as you are.

 

[audreyh1]

Congrats!

My planning and projection spreadsheets are from back in the late 1990s! I’m not even sure I can open them anymore.

I do track NW against inflation and have that tracking going back to 1999.

 

[FLSUnFIRE]

My planning tool for cash flow (linear growth) is pretty close to reality 2.5 years in after the market recovery.


@audreyh1, my sheets trace their lineage from 1996-98 and I'm still using Office 2010. I occasionally come across a vestigial offshoot on my HD where I was playing around with some idea or another and it's interesting to see how they've evolved and the things I thought were worth analysis!

 

[Koolau]

I applaud you for having a plan. I really never have had one. I do rear-view-mirror calculations from time to time (calculate E-O-Y NW for instance.)

I do set goals (like reduce the amount in tIRAs and 401(k) plan. I did pretty well with that having converted all my tIRAs to Roths. The 401(k) has been more difficult to lower - not that I'm complaining too much.

After 18 years, I think I'm doing it okay in the FIRE world. I have "enough" and the stash is growing faster than inflation, so I don't worry too much about such things. In hind sight, I could have made a lot more money, but I don't really spend what I have, so can't complain (but sometimes I still do.)


Sounds like you have your FIRE plan very well under control. Congratulations!

 

[joesxm3]

Thanks, but I don't have as much of a plan as you might think.

I was heavy into planning but just my own spreadsheets up to the day my BS bucket overflowed. But after that I figured that the trigger had been pulled so what will happen will happen.

I have been trying to do modeling to try to smooth out the future tax bump. But at this point I feel that the chance of me dying early is higher than the chance of out living my money. After having gone through the sale of my parent's house my main goal is throwing out junk to make it easy when my time to go comes.

Last week it hit me that my mother was the last one of her generation. Parents and all aunts and uncles gone. That puts me in the oldest generation. Basically in the waiting room. That was quite a shock.