Mortality and the perfect retirement calculator

[Animorph]

OK, but let's put some numbers to that -

I just did some FIRECalc runs at "Investigate/Spending" with a 100% success:

30 Years - SWR = 3.59%
35 Years - SWR = 3.45%
40 Years - SWR = 3.34%
45 Years - SWR = 3.24%

If I go to 50 years, SWR starts increasing, as has been discussed - most likely due to dropping off some bad periods (actually, the inflection point is at 46 years - I just ran every year, and it is very linear until a steep rebound at 46 - so 1966?).

So for a $1M portfolio, we are talking the difference between spending $35,900 per year (CPI adjusted each year) to support a 30 year LE, and $32,400 to support a 45 year LE. That is 15 additional years, not "a few weeks". And if you can't pay for them, who will?

That is a less than 10% cut in spending. Is that really the difference between "a fun and experienced life" and "scrimp and save"? Ten percent is not insignificant, but for many of us, well worth it to greatly reduce the chance that we will be a burden on our families.

-ERD50

I see that and think FIRECalc isn't "accurate" to 10%. Reducing the WR by 10% guarantees you nothing but 10% less income from your portfolio. I'm happy to be in the ballpark with FIRECalc, and I'll adjust as necessary to keep the portfolio value comfortable.

 

[ERD50]

I see that and think FIRECalc isn't "accurate" to 10%. Reducing the WR by 10% guarantees you nothing but 10% less income from your portfolio. I'm happy to be in the ballpark with FIRECalc, and I'll adjust as necessary to keep the portfolio value comfortable.

I suspect that FIRECalc is very accurate in reporting what has happened historically.

Reducing the WR by 10% actually would guarantee that your portfolio lasts longer than if you didn't reduce spending. How can it not?

OK, but I've been saying, I think people underestimate how much can be accomplished with adjustments.

-ERD50

 

[Animorph]

I suspect that FIRECalc is very accurate in reporting what has happened historically.

Reducing the WR by 10% actually would guarantee that your portfolio lasts longer than if you didn't reduce spending. How can it not?

OK, but I've been saying, I think people underestimate how much can be accomplished with adjustments.

-ERD50

Oh yeah, that's all true. My detailed retirement plan, with x% growth every year, says if I save about 10% of my spending I have a ridiculous ending portfolio value in today's dollars. But still, the unknowns kind of swamp out the 10% stuff. Heck, 10% is like waiting "One More Year" with decent investment gains and savings.