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bltkmt
Recycles dryer sheets
I see - thanks.
Firecalc question
- Thread starter bltkmt
- Start date
For me VPW still is way too aggressive, they have us with a 4.7% WR on a 44 year retirement. The key of course is when you look at the downside, no way we would be comfortable with those #s. I get the methodology as their goal is to get close to zero leftover vs. Firecalcs goal is to never run out of money so on average you would be leaving millions leftover to account for the worst case scenarios.
Thats why I'm +4 on the reretire each year concept. Maybe once I get closer to 70 I'll use VPW to blow that dough as we don't have kids.
Thats why I'm +4 on the reretire each year concept. Maybe once I get closer to 70 I'll use VPW to blow that dough as we don't have kids.
Agree. I’m always surprised at how often people mention the 4% rule. For 100% success rate at 45years retirement I believe the swr is 3.28%, if I ran the numbers right. With a long mortgage, for us it ends up being 3.5%.
That said, when targeting 100%, I feel pretty ok upping our expected withdrawal rate based on the retire again principle. I have zero problem finding more to spend $ on!
ychuck46
Recycles dryer sheets
For reference only
FIREcalc and all the other retirement calculators are to be used with a grain of salt. I would never be comfortable running up anywhere close to where they theoretically say you might make it; I much prefer to be well inside the 100% probability #s with a nice cushion, as you seem to be. In our case we only spend about 1.5% of assets in any given year in addition to our SS. And since I have been doing well with our investments for the last couple of years, gaining 40% or more on a diversified portfolio, our assets are multiplying well.
Some might say to "live more and enjoy yourselves", but we do that now. We travel many months each year (we have lots of paid off timeshare points) and we also cruise with Carnival multiple times per year in addition to those vacations. No debts and we give regularly to charities we like, and eat out often, just not at pricey places. Life is good and we, as are many in this website, are blessed.
FIREcalc and all the other retirement calculators are to be used with a grain of salt. I would never be comfortable running up anywhere close to where they theoretically say you might make it; I much prefer to be well inside the 100% probability #s with a nice cushion, as you seem to be. In our case we only spend about 1.5% of assets in any given year in addition to our SS. And since I have been doing well with our investments for the last couple of years, gaining 40% or more on a diversified portfolio, our assets are multiplying well.
Some might say to "live more and enjoy yourselves", but we do that now. We travel many months each year (we have lots of paid off timeshare points) and we also cruise with Carnival multiple times per year in addition to those vacations. No debts and we give regularly to charities we like, and eat out often, just not at pricey places. Life is good and we, as are many in this website, are blessed.
HopeToGolf
Confused about dryer sheets
- Joined
- May 29, 2021
- Messages
- 6
A little off topic but what are your plans for what remains after you die?
While I am not yet FIREd, if all goes to plan I should spend less than I can (per Firecalc and the like) and will leave the rest to the offspring and charities/schools. If my expenses are 1.5% of my total assets, I hope I have the ability to spend and/or give more while living.
Dtail
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yep, VPW is usually liked as it always provides higher WR% than Firecalc and most other calculators.
Of course if you underestimate your ending date by a lot....
ychuck46
Recycles dryer sheets
Comfortable with how things are going
Similar to your plans in many ways. We do a lot for our only child and her husband during each year. In addition, I have held the mortgages for her first two houses, not charging any interest, just monthly payments to get my original money back. We also do a lot for charities of our choice, mostly the male and female rescue missions here in our area of TN (I don't support large national charities anymore with their high expense ratios).
Will be meeting with a trust attorney next week since TN, for all the great things about it, is a state that virtually 100% of the time forces estates into probate (wills oftentimes are meaningless). To avoid that and make things easier for our daughter we will put things into a revocable trust, sheltering her from the hassle of a drawn out probate process, and minimizing taxes.
We have been fortunate that the stock market has given us a lot of opportunities to succeed and grow our assets over the last two years. In fact, 2020 was my best year ever, and 2021 is shaping up very well, too. I make all the investing decisions for our household and I have been fortunate to handily beat the market returns over those timeframes. Best wishes to you.
Similar to your plans in many ways. We do a lot for our only child and her husband during each year. In addition, I have held the mortgages for her first two houses, not charging any interest, just monthly payments to get my original money back. We also do a lot for charities of our choice, mostly the male and female rescue missions here in our area of TN (I don't support large national charities anymore with their high expense ratios).
Will be meeting with a trust attorney next week since TN, for all the great things about it, is a state that virtually 100% of the time forces estates into probate (wills oftentimes are meaningless). To avoid that and make things easier for our daughter we will put things into a revocable trust, sheltering her from the hassle of a drawn out probate process, and minimizing taxes.
We have been fortunate that the stock market has given us a lot of opportunities to succeed and grow our assets over the last two years. In fact, 2020 was my best year ever, and 2021 is shaping up very well, too. I make all the investing decisions for our household and I have been fortunate to handily beat the market returns over those timeframes. Best wishes to you.
At the link, Kitces proposed a simple ratcheting rule from the 4% withdrawal that like variable strategies like VPW or Guyton-Klinger, would give you more in prosperity, but unlike variable strategies would not reduce in bad times. Kitces proposed that once your portfolio goes by 50% above initial, that you give yourself a 10% raise (and repeat if it keeps going up). This was always as safe as the original 4% rule and could deliver more spendable income.
https://www.kitces.com/blog/the-rat...l-rate-a-more-dominant-version-of-the-4-rule/
https://www.kitces.com/blog/the-rat...l-rate-a-more-dominant-version-of-the-4-rule/
OP
OP
bltkmt
Recycles dryer sheets
Another question for those of you that use FIREcalc to "re-retire" each year...do you shorten the retirement horizon each year? For instance, if you start with 35 years, in year two do you use 34 years?
Turbo29
Full time employment: Posting here.
The fact you have lived one year longer decreases your life expectancy by less than one year.
Example a male 65 can expect to live 18.09 years; a male 66 can expect to live 17.38 years, a difference of 0.71 years) Social Security Actuarial Life Table
Maybe to decrease your horizon by one year every other year or every three years would be more accurate. Or if you wish to be conservative, don't decrease it at all.
Andre1969
Thinks s/he gets paid by the post
In my case, I've been carrying out my projections to the age of 100, I started running spreadsheets when I was 43, and I'm 51 now. If I was only running projections for a comparatively short time, I might be tempted to keep the number of years the same, but in picking an age I probably won't live to, I reduce the timespan by one year every time I update.
However, planning for 57 years, or even 49 years, is still an awful long time, and with FireCalc's back testing, the most recent scenario that would encompass would only be what? Like 1971-2020, roughly? So, because of that, I'll also run it for shorter lengths of time, just to see if there's any shorter cycles that might have failed. For instance, right now, FireCalc only has 102 49-year cycles. But it has 112 39-year cycles, 122 29-year cycles, and so on.
One thing that's a bit of an eye-opener is to do a really short duration, and see how widely things can vary. For instance, I have a 99% chance of success with the 49 year cycles (only 1 out of 102 failed) and a 100% chance with the 39-year. But, if I shorten it to a 19 year cycle, which takes me out to 2040 and the age of 70, it paints a different story. While I have a 100% chance of success, some of the projections look like they're doomed to failure.
In my case, I used $2.5M as a start point, $90K per year spending, and collecting $17.1K per year SS starting in 2032, when I turn 62. For the end year, FireCalc has a range of $836K to $12.5M, with an average of $4.4M. So, I have a very good chance of being just fine. But, if I was on the path that led me to only having $836K left over at the end of 19 years, I might be a bit worried about continuing to spend $72.9K per year like the prosperity is going to last forever. So, I would look at that particular year as a potential failure cycle. Actually, digging a bit deeper, 39 of those cycles dropped below $1.5M at some point in those 19 years, while 10 dropped below $1M.
Now, I would imagine that most of those $1.5M levels would be able to recover, and go on to be successful runs, but I'd think dropping below $1M might be cutting it close.
