How long will it take to get to FIRE?

[firedata]

What tools do you use to estimate the time it'll take you to FIRE? I've seen some online calculators but they are a little underwhelming (i.e. Networthify).
They assume a fixed return on investment and no asset allocation.

FIRECalc would be interesting to use given all the data embedded within, but it doesn't seem to be able to run in "when will I hit my magic number?" mode.

Does anyone have a go-to tool they use for projecting when they'll be able to pull the plug?

 

[Independent]

I built my own. It can start out very simple when I'm a long way from retirement, then get more complicated as I get closer.

Building it myself means that I know all the assumptions and shortcuts that go into it.

 

[COcheesehead]

Simple one.

https://www.fidelity.com/calculators-tools/fidelity-retirement-score-tool

 

[SecondCor521]

I built my own Excel spreadsheet. But I also like the table in this article which assumes starting from zero and takes as input savings rate and spits out years to go:

The Shockingly Simple Math Behind Early Retirement

 

[firedata]

Simple one.

https://www.fidelity.com/calculators-tools/fidelity-retirement-score-tool

That was nice and simple. Not entirely what I'm looking for, but clear and nice design.

I built my own Excel spreadsheet. But I also like the table in this article which assumes starting from zero and takes as input savings rate and spits out years to go:

The Shockingly Simple Math Behind Early Retirement

I built my own. It can start out very simple when I'm a long way from retirement, then get more complicated as I get closer.

Building it myself means that I know all the assumptions and shortcuts that go into it.

thanks, for the replies. That graph was from the networthify link I mentioned earlier. I have a simple spreadsheet as well. Excel has it's benefits but it can't really bring in historical data (or at least I don't have the skills to do so).

I really like FIRECalc's use of historical data to provide a range of results/outcomes. So, instead of success rate, you'd get something like 15% of the time it takes less than 10 years to FIRE and 20% of the time it takes more than 20 years. Something like that would be pretty nice.

 

[Dtail]

Firecalc - Why not fool around with the different choice of years to retire section while achieving your desired success rate?

 

[Skeptic]

There's an iPhone/Android app call Pretirement that I really like precisely for this purpose:

https://pretirementfi.com

You tell it when you were born, how much you've got, and the magic number that you want to get to, and with a few assumptions about interest rates and such, it spits back

"Just keep working for ... 1 year 8 months 30 days and 9:35:03, until Aug 28, 2020, 6:48:45 AM"

Moreover, it keeps track of the changes in your assets over time, so you can see how your projected retirement date changes with them. It's been kind of a depressing ride this year.

It's all just fun, not anything I'd use to make critical decisions. I like tracking things like that.

 

[JackJester]

portfoliocharts Checkout their "Financial Independence" calculator. See this link for an example of the calculator with the 3 Fund AA. https://portfoliocharts.com/portfolio/three-fund-portfolio/


This site is excellent and allows you to build your own AA or view most of the popular ones. You can then assess SWR, CAGR, and other importance components needed to determine when to FIRE based on your AA.

 

[RunningBum]

Too unpredictable for me, until you get close. IMO, don't be wasteful with money, invest aggressively, save as much as you can, as you'll get there. Figure out your retirement budget and use Firecalc or 4% or 3.5%. If you're within 3-5 years, you can probably figure it out. If you're still 10-15 years out, I'm not sure what you'd do with a projected date, and it's not likely to hold anyway.

 

[mrfeh]

What tools do you use to estimate the time it'll take you to FIRE? I've seen some online calculators but they are a little underwhelming (i.e. Networthify).
They assume a fixed return on investment and no asset allocation.

FIRECalc would be interesting to use given all the data embedded within, but it doesn't seem to be able to run in "when will I hit my magic number?" mode.

Does anyone have a go-to tool they use for projecting when they'll be able to pull the plug?

Unless you're within a few years of your number, I don't think this exercise is worthwhile, assuming most of your net worth gains are coming from equities, which are volatile.

Simply save and invest as much as you can. You'll get there when you get there.

 

[38Chevy454]

Too unpredictable for me, until you get close. IMO, don't be wasteful with money, invest aggressively, save as much as you can, as you'll get there. Figure out your retirement budget and use Firecalc or 4% or 3.5%. If you're within 3-5 years, you can probably figure it out. If you're still 10-15 years out, I'm not sure what you'd do with a projected date, and it's not likely to hold anyway.

Agree, it is just en exercise until you get close. I mainly used the Fidelity retirement income planner from 10 years out, as at the time I was not too concerned with other sources.

 

[COcheesehead]

There's an iPhone/Android app call Pretirement that I really like precisely for this purpose:

https://pretirementfi.com

You tell it when you were born, how much you've got, and the magic number that you want to get to, and with a few assumptions about interest rates and such, it spits back

"Just keep working for ... 1 year 8 months 30 days and 9:35:03, until Aug 28, 2020, 6:48:45 AM"

Moreover, it keeps track of the changes in your assets over time, so you can see how your projected retirement date changes with them. It's been kind of a depressing ride this year.

It's all just fun, not anything I'd use to make critical decisions. I like tracking things like that.

I just tried this one. It told me I could retire in 1969...when I was 6 years old. Technical error I am sure.

 

[Car-Guy]

Like many others, I built my own spreadsheets (that was so far back I started with a Big Chief tablet and #2 pencil and then converted to Multiplan when it came out ) It wasn't that hard back in the early days since I knew FIRE was a very long ways out and the numbers were a lot smaller. About the time I reached ~50 years of age, things started to take shape both in my mind and on my evolving custom spreadsheets. It was about then that I started getting serious about tracking things. Everything was done on spreadsheets and I felt very comfortable with what was going into the spreadsheets, the "assumptions" that were made (e.g. inflation rates) life expectancy, return rates, tax rates, RMD's, etc, etc.

 

[Major Tom]

Too unpredictable for me, until you get close.

+1. If you're a fairly long way from being FI, there are too many potential variables that are hard to predict. In my case, I had extra sources of income in the form of being able to sell some houses during a property boom I wasn't expecting, and a modest inheritance. Like a few others have said, my plan was to save as much as I could (within reason) figuring that the more I was able to save, the sooner I'd get there.

Online calculators either didn't exist, or were in their infancy, when I started daydreaming about retiring. I just scribbled multiple imaginary scenarios involving different savings and interest rates. They were enough to satisfy me that I stood a fairly good chance of succeeding, if I did my best. That's all anyone can hope for when we're talking about the future anyway, isn't it?

 

[COcheesehead]

Fidelity's Retirement Preparedness Calculator https://www.fidelity.com/calculators-tools/planning-guidance-center
is good for ballparking where you stand. It gives you a score. 100 = right on target. If above, you're better off, below and you have some work to do. All based on your target date and income preferences. It also back tests your AA.

 

[Dtail]

Fidelity's Retirement Preparedness Calculator https://www.fidelity.com/calculators-tools/planning-guidance-center
is good for ballparking where you stand. It gives you a score. 100 = right on target. If above, you're better off, below and you have some work to do. All based on your target date and income preferences. It also back tests your AA.

+1 still use it in retirement and will continue to do so. Combined with Firecalc, one gets historical sequence calculations in conjunction with the Monte Carlo calcs of Fidelity.

 

[kgtest]

What tools do you use to estimate the time it'll take you to FIRE? I've seen some online calculators but they are a little underwhelming (i.e. Networthify).
They assume a fixed return on investment and no asset allocation.

FIRECalc would be interesting to use given all the data embedded within, but it doesn't seem to be able to run in "when will I hit my magic number?" mode.

Does anyone have a go-to tool they use for projecting when they'll be able to pull the plug?

I built my own, it looks at where my debt and equity should be at the end of each year, vs where I am currently in the year. I built a pivot visual to show me my expected vs actual progress. Currently with the latest market declines and daycare I got about 9% behind my target / expected. With one month to go, hoping for strong gains to push me closer.



I figure if I am within 5% of my expected come actual FIRE I can take the leap.

 

[Independent]

I really like FIRECalc's use of historical data to provide a range of results/outcomes. So, instead of success rate, you'd get something like 15% of the time it takes less than 10 years to FIRE and 20% of the time it takes more than 20 years. Something like that would be pretty nice.

What is "success" in this case? You've said that you're looking for a tool that will tell you when you can retire. Is success hitting a specific magic number?

Recognize that historic US stocks show a long wave.

You might discover in one scenario that you hit the magic number in 1966. That was kind of early because it was at the end of the post-war bull. But, of course, 1966 was a lousy year to retire because it was the start of a bear market.

Or, you might find that another scenario tells you that you couldn't retire in 1981, because your stocks have been hammered by the bear market. But, 1981 was a great year to retire, because it was the beginning of a long bull market.

I think I'd have to define success as surviving through my retirement. If I'm currently 10+ years away, I need to run a lot of years. Then, I start running out of historic data.

You haven't shared your current age or your hoped for retirement age. Those numbers may affect the tool you use.

-----

You mentioned getting data. Rober Shiller still has downloadable stock, cpi, and 10 year treasury data here: http://www.econ.yale.edu/~shiller/data.htm

Click on "US Stock Markets 1871 ...". That is already formatted as an Excel spreadsheet.

 

[firedata]

thank you everyone for the replies. I spent some more time on google to try and see if anything else out there met my needs. My google-fu was tested but I came up with a good set of keywords (when+can+I+retire+historical+data+calculator):

https://www.google.com/search?q=when+can+I+retire+historical+data+calculator

the first result (engaging-data) is pretty much what I said I was looking for (uses historical data and is pretty straightforward to use and provides a range of results of when I can retire, and provides a nice set of graphs). Here is my graph:

It basically confirmed what I had guestimated previously, that I could probably retire early in a little over a decade, around 50ish, assuming all goes okay.
It's not perfect, as it doesn't include the option of adding expenses that may be temporary (college for the kids), but it's pretty close.

 

[mrfeh]

thank you everyone for the replies. I spent some more time on google to try and see if anything else out there met my needs. My google-fu was tested but I came up with a good set of keywords (when+can+I+retire+historical+data+calculator):

https://www.google.com/search?q=when+can+I+retire+historical+data+calculator

the first result (engaging-data) is pretty much what I said I was looking for (uses historical data and is pretty straightforward to use and provides a range of results of when I can retire, and provides a nice set of graphs). Here is my graph:

4% withdrawal rate does not apply to early retirees.

 

[firedata]

4% withdrawal rate does not apply to early retirees.

You say that like it's a fact. I would argue it depend on your risk tolerance and of course, other outside factors (changes in income and expenses). I acknowledge that the failure rate generally tends to increases over time as you increase the length of time you are modeling.

However, I am assuming several things that make 4% reasonably conservative in my situation. It's only 4% initially. That 4% spending includes mortgage payments that will go away after 20ish years and social security would start in about 12-17 years if I retire at 50ish. These two changes are pretty major. For this, I can simulate my retirement in firecalc in all its gory detail and see that my success rate is fine once I hit my magic number.

 

[Dtail]

You say that like it's a fact. I would argue it depend on your risk tolerance and of course, other outside factors (changes in income and expenses). I acknowledge that the failure rate generally tends to increases over time as you increase the length of time you are modeling.

However, I am assuming several things that make 4% reasonably conservative in my situation. It's only 4% initially. That 4% spending includes mortgage payments that will go away after 20ish years and social security would start in about 12-17 years if I retire at 50ish. These two changes are pretty major. For this, I can simulate my retirement in firecalc in all its gory detail and see that my success rate is fine once I hit my magic number.

4% for the initial WR% plus yearly inflation increases on which Firecalc WR concept is based on would be shakier for retirement periods for ex 40 years.
Although very few actually spend in this manner.

 

[HI Bill]

It basically confirmed what I had guestimated previously, that I could probably retire early in a little over a decade, around 50ish, assuming all goes okay.
It's not perfect, as it doesn't include the option of adding expenses that may be temporary (college for the kids), but it's pretty close.

Falling somewhere between the green dots on the horizontal line is the most likely outcome, but the outliers are at opposite ends of the line. If we have a bad sequence of returns (a number of down market years in a row), you could end up nearer the right end of the line; if things go like they were going from 2008-2017, much sooner. I watched my investments languish for something like a decade, and then they took off!

I just assume my investments will make 6-7% annually, and add in annual contributions in a spreadsheet. Doesn't always work out that way, though (like this year).

 

[ESRwannabe]

What tools do you use to estimate the time it'll take you to FIRE?

My early retirement withdrawal strategy is to just spend the dividends from my taxable investments (50/50, Vanguard High Div Yield Index and Vanguard International High Div Yield Index). So essentially all I need to do is get dividend income up high enough to cover my expected living expenses. I'm using Mint to track my current expenses.

https://www.mint.com/

On seekingalpha they have good information on dividend growth. So, I can take that data and then simply calculate out the compound growth of the dividend income using the last 10 year avg div growth rate. That gives me a descent idea of how long it will take for dividend income to reach a certain amount.

https://seekingalpha.com/symbol/VHDYX/dividends/dividend-growth

https://seekingalpha.com/symbol/VIHAX/dividends/dividend-growth

To calculate the compound growth I wrote a simple program to calculate it. I would imagine someone could do the same with excel, or find a free program on the web.

I just did a search on google and found this on how to calculate compound growth using excel.

https://www.extendoffice.com/documents/excel/2596-excel-average-compound-growth-rate.html

 

[GravitySucks]

4% withdrawal rate does not apply to early retirees.

Bengens follow up research found 4% to be SAFEMAX forever, and a bit over 4.5 % ad SAFEMAX for a 30 year period.